Beta Capital Management Llc

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS, THE FIRM CONSENTED TO THE SANCTIONS AND TO THE ENTRYOFFINDINGS THAT IT FAILED TO ACCURATELY CALCULATE ITS REQUIRED CUSTOMER RESERVE REQUIREMENT ANDTOMAINTAIN A SUFFICIENT BALANCE IN ITS RESERVE ACCOUNT. THE FINDINGS STATED THAT THE FIRMERRONEOUSLYDESIGNATED CERTAIN CUSTOMER ACCOUNTS AS NON-CUSTOMER FOR PURPOSES OF THE RESERVEFORMULA. AS ARESULT, CUSTOMER CREDIT BALANCES AND CUSTOMER DEBIT BALANCES WERE TREATED AS NON-CUSTOMER CREDITSAND DEBITS. THIS CAUSED THE FIRM TO MISCALCULATE ITS CUSTOMER RESERVEREQUIREMENT WHEN THE FIRM WASPREPARING FIVE OF ITS MONTH-END FOCUS REPORTS. THE HINDSIGHTDEFICIENCIES RESULTING FROM THE FIRM'SMISCALCULATION OF ITS RESERVE REQUIREMENT RANGED FROM APPROXIMATELY $1.3 MILLION TO $13.4 MILLION ANDTOTALED APPROXIMATELY $27.8 MILLION. THE FINDINGSALSO STATED THAT THE FIRM FILED INACCURATE FOCUSREPORTS AND MAINTAINED INACCURATE BOOKS ANDRECORDS. THE FIRM'S RECORD OF ITS COMPUTATION OF ITSRESERVE ACCOUNT REQUIREMENT AND FIVE FOCUSREPORTS FILED BY THE FIRM BASED ON THOSE COMPUTATIONS WEREINACCURATE, WITH ALMOST ALL OF THEFOCUS REPORTS UNDERSTATING THE FIRM'S RESERVE REQUIREMENT. THEFINDINGS ALSO INCLUDED THAT THEFIRM FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDINGWSPS, REASONABLY DESIGNEDTO ACHIEVE COMPLIANCE WITH EXCHANGE ACT RULE 15C3-3'S CUSTOMER RESERVEREQUIREMENT. WHEN THEFIRM CONVERTED TO SELF-CLEARING, IT HAD NO SUPERVISORY SYSTEMS, INCLUDING WSPS,RELATING TO THECODING OF ACCOUNTS AS CUSTOMER OR NON-CUSTOMER, THE INCLUSION OF ACCOUNTS IN THECUSTOMERTRIAL BALANCE AND RESERVE FORMULA, OR THE RECONCILIATION OF CUSTOMER CREDIT AND DEBITBALANCES.THE FIRM ALSO DID NOT CONDUCT SUPERVISORY REVIEWS TO ENSURE ACCOUNTS WERE PROPERLYDESIGNATEDAS CUSTOMER OR NON-CUSTOMER. FURTHER, SINCE THE FIRM'S SUPERVISORY REVIEW OF ACCOUNTCODINGCOMPARED THE ASSIGNED CODES (E.G., CUSTOMER OR NON-CUSTOMER) TO THE ACCOUNT INFORMATIONONFILE, THE FIRM COULD NOT IDENTIFY POTENTIAL INACCURACIES IN DESIGNATING ACCOUNTS AS CUSTOMER ORNON-CUSTOMER. Status: Final Sanction Detail: THE FIRM WAS CENSURED, FINED $115,000, AND REQUIRED TO CERTIFY THAT IT HAS REMEDIATED THE ISSUES IDENTIFIED IN THE AWC AND IMPLEMENTED A REASONABLY DESIGNED SUPERVISORY SYSTEM,INCLUDING WSPS. Summary: WITHIN 90 DAYS OF THE NOTICE OF ACCEPTANCE OF THE AWC (WHICH WAS MAY 20 2024), THE APPLICANT WILL CERTIFYIN WRITING THAT AS OF THE DATE OF THE CERTIFICATION, THE FIRM HAS REMEDIATED THE ISSUES IDENTIFIED IN THEAWC AND IMPLEMENTED A SUPERVISORY SYSTEM, INCLUDING WRITTEN SUOERVSORY PROCEDURES, REASONABLYDESIGNED TO ACHIEVE COMPLIANCE WITH EXCHANGE ACT RULE 15C3-3 REGARDING THE ISSUES IDENTIFIED IN THEAWC. IN ADDITION, THE FIRM CONSENTED TO THE IMPOSITION OF A CENSURE AND A $115,000 FINE AS A RESULT OFFINRA'S FINDINGS.