FINRA Cites Florida Broker-Dealer for Supervisory Failures

AAG Capital, Inc. (CRD #188) is a brokerage firm that is headquartered in Wesley Chapel, Florida and licensed to operate in 51 U.S. states and territories. Recently, the Financial Industry Regulatory Authority (FINRA) fined and sanctioned AAG Capital, Inc. for supervisory failures. Here, our Miami investment fraud lawyer provides a more comprehensive overview of the case.

FINRA Disciplinary Action: Florida-Based Brokerage Firm AAG Capital, Inc. 

In May of 2025, FINRA took enforcement action against AAG Capital, Inc. The Florida-based brokerage firm was fined $100,000 and ordered to pay $38,591.39 in financial restitution to affected investors. The broker-dealer was also required to take corrective action. Without admitting or denying any of the specific allegations raised by FINRA, AAG Capital, Inc. consented to the proposed penalties.

The agency found that the firm failed to have proper written policies and a strong supervisory system to make sure its recommendations of registered index-linked annuities (RILAs) to retail customers followed Regulation Best Interest (Reg BI). More specifically, the brokerage firm reportedly did not adequately supervise recommendations to exchange existing insurance products, including fixed index funds and variable annuities.

Along with other things, it failed to properly evaluate the downsides of these switches, including customers losing valuable benefits like death benefits or income riders and paying surrender fees. Supervisors also failed to get sufficient documentation to judge whether the RILA recommendations truly benefited customers. Brokers and broker-dealers have a duty to make suitable investment recommendations.

Note: FINRA’s suitability rule is one of the most important in the securities industry. Rule 2111 requires broker-dealers and their associated persons to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for a customer based on their profile.

What to Know About FINRA’s Supervisory Rules 

Brokerage firms have a responsibility to properly supervise their individual representatives. Indeed, FINRA requires broker-dealer firms to establish and maintain a supervisory system that is reasonably designed to ensure compliance with federal securities law. Under FINRA Rule 3110, firms must adopt written supervisory procedures (WSPs) that address how they monitor registered representatives’ activities, handle customer interactions, and ensure product recommendations meet suitability or Regulation Best Interest (Reg BI) standards.

Notably, FINRA Rule 3110 mandates the designation of supervisors to provide oversight, establishes clear documentation requirements for supervisory responsibilities, and mandates the performance of internal inspections at both branch and non-branch locations. All brokerage firms must reasonably prevent and detect misconduct, including unsuitable recommendations, excessive trading, and conflicts of interest. Supervisory systems should be proactive, not merely reactive.

 Contact Our Miami, FL Securities Fraud Lawyer Today

At ​Carlson & Associates, P.A., our Miami securities fraud attorney is standing by, ready to fight to protect your rights and your interests. We are proud to put investors first. If you suffered major investment losses due to a brokerage firm’s failure to supervise, we are here to help. Contact us now for a fully confidential, no obligation initial consultation.

Source:

brokercheck.finra.org/firm/summary/188