FINRA Fines Tifin $30,000 Over Net Capital Deficiencies

Updated October 2026. First published April 2025. The first version got the case wrong. FINRA's order is about net capital and unrecorded expenses, not electronic communications, and the fine was $30,000, not $50,000.

On February 27, 2025, FINRA accepted a Letter of Acceptance, Waiver, and Consent from Tifin Private Markets LLC (AWC No. 2022077353001). The firm agreed to a censure and a $30,000 fine, without admitting or denying the findings.

FINRA found that Tifin ran a securities business without the minimum net capital the SEC's net capital rule requires, in two separate periods: May 1 to August 31, 2020, and August 1 to October 14, 2022. In both periods its net capital computations were wrong, and five monthly FOCUS reports carried the wrong numbers. The cause was the same both times, and it's an ordinary one. Vendor bills weren't on the books when the firm used the services.

What the Order Says Happened

Tifin is a small New York firm. It has been a FINRA member since May 1, 2020, and was called Qualis Capital LLC until June 2022. When it signed the AWC in November 2024, it had three registered representatives and raised capital from investors through private placements.

The first deficiency began the day the firm became a member. From May 1 to August 31, 2020, Tifin didn't accrue the cost of data services from a vendor as the vendor provided them. Its liabilities were understated, and its net capital deficiency ranged from $7,587 to $154,830.

The second period involved the same data vendor and one more. From August 1 to October 14, 2022, Tifin accrued only part of what it owed the data vendor. It also didn't accrue monthly consulting fees from a second vendor when it incurred them. This time the deficiency ranged from $194,151 to $298,850.

The case started with Tifin's own filing. On October 26, 2022, the firm filed a financial notification reporting a net capital deficiency. The order doesn't say how the firm found the missing accruals.

FINRA cited two groups of rules. For the capital shortfall, it cited Section 15(c) of the Exchange Act, Exchange Act Rule 15c3-1(a), and FINRA Rules 4110(b)(1) and 2010. For the records, it cited Section 17(a) of the Exchange Act, Exchange Act Rules 17a-3 and 17a-5, and FINRA Rules 4511 and 2010.

How an Unrecorded Bill Puts a Firm Under

Rule 15c3-1(a) says every broker-dealer must at all times hold net capital of at least the greater of two amounts. The first is a dollar floor set by the kind of business the firm does. It runs from $250,000 for a firm that carries customer accounts down to $5,000 for a firm that never receives or holds customer funds or securities and does none of the other listed activities. The second applies to a firm on the aggregate indebtedness standard: its aggregate indebtedness, meaning its total money liabilities, can't exceed 1,500 percent of net capital, or 800 percent in its first 12 months of business.

A bill you've incurred but haven't recorded affects both. Once you book it, it cuts net worth, and so net capital, dollar for dollar. It also adds to aggregate indebtedness, which raises the ratio-based minimum. For a firm with a $5,000 floor and a thin cushion, one month of unrecorded fees can be enough to fall below the line. The order doesn't state which minimum applied to Tifin.

The books-and-records findings come from the same entries. As the order puts it, Rule 17a-3(a)(2) requires ledgers that reflect all assets and liabilities, "including by accurately accruing all liabilities." Rule 17a-3(a)(11) requires accurate net capital computations, and Rule 17a-5(a) requires accurate FOCUS reports. A missed accrual makes all three wrong at once. Our pages on Rule 15c3-1 and Rule 17a-5 cover the computation and the filings in more detail.

FINRA Rule 4110(b)(1) turns the accounting error into a business problem. The order describes it this way: a member "shall suspend all business operations during any period in which it is not in compliance" with Rule 15c3-1. FINRA found that Tifin conducted a securities business through both deficient periods.

What a Small Firm Should Check

Tifin's facts point at the month-end close more than at capital planning. If you run a firm with a low dollar floor, these checks belong in your written procedures:

List every vendor that bills you on a recurring basis: market data, consulting, technology, compliance support, rent. Book each month's cost in the month you receive the service, whether or not the invoice has arrived. If an invoice is late, estimate from the contract and correct the entry when the bill comes.
Compare what you accrued with what the contract says you owe. In 2022 Tifin accrued part of its data vendor's charges, and the partial accrual still understated its liabilities.
Recompute net capital after the accruals and before the FOCUS report goes out. Write down which minimum applies to you, the dollar floor or the ratio, and how big your cushion is in dollars.
Know the notice triggers in Rule 17a-11. A firm whose net capital falls below its minimum must give notice that same day. A firm on the aggregate indebtedness standard must give notice within 24 hours if aggregate indebtedness goes above 1,200 percent of net capital. A firm that fails to make and keep current books and records must give notice that same day and report within 48 hours on what it's doing to fix them.
Name the person who stops new business. Rule 4110(b)(1) applies during any period of noncompliance, so someone needs the authority to halt activity the day a computation shows a deficiency.

The fine was small. The AWC is still part of Tifin's permanent disciplinary record, and FINRA or any other regulator can consider it in a future action.

This post is for informational purposes only and does not constitute legal advice. For guidance on specific regulatory obligations, consult your counsel or compliance advisor.