Baltimore broker pays $30,000 fine He also is suspended over financial records

January 20, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Nathan A. Chapman Jr., president of the Baltimore-based Chapman Co. brokerage, has paid a $30,000 fine to settle a complaint by a securities regulator that the company bought and sold stocks while it failed to maintain proper capital ratios in 1993 and 1994.

Mr. Chapman also drew a 10-day suspension from performing financial and operational duties at the firm, the National Association of Securities Dealers' conduct committee said in its order.

He neither admitted nor denied the allegations.

"We thought it best to settle it and not litigate it," said Mr. Chapman of the Nov. 30 order, which was made public yesterday.

The NASD also said Mr. Chapman and his company:

* Inaccurately computed net capital and debts in November 1993, and for the first three months of 1994.

* Gave inaccurate financial reports to the NASD in November 1993 and for the first quarter of 1994.

* Failed to give NASD officials timely notice of capital deficiencies.

Mr. Chapman would not comment on whether he has served the suspension. An NASD spokesman said the suspension should have started Jan. 15. Calling the violations unintentional, Mr. Chapman said: "Nothing has happened like this in our 10-year history."

Executives who operate brokerage firms in the area were surprised that the NASD regulator said Chapman Co. failed to meet its net capital requirements for several months in a row.

Chapman Co. has had other run-ins with the NASD. According to the order, the firm agreed to censure and an $8,500 fine for permitting an improperly-registered employee to work as a municipal, general and government securities representative.

Also, in 1994, Mr. Chapman proposed to invest $10 million in Baltimore pension funds promising double-digit returns. He withdrew the request after the Securities and Exchange Commission issued a warning about potential legal and financial risks.

Federal regulators concluded then that the investment would enable the city to effectively control Chapman Co.

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