Charles Schwab & Co. agreed to pay US $2 million to the Financial Industry Regulatory Authority to resolve allegations that it had net capital deficiencies on three days in 2014. According to FINRA, the amounts of Schwab’s deficiencies were US $287 million, US $612 million and $US 775 million, respectively. FINRA claimed that Schwab violated applicable securities law related to minimum net capital requirements for broker-dealers because of unsecured loans of US $1 billion extended to its parent company, Charles Schwab Corporation, on each of the three days. FINRA said Schwab’s Treasury Group made the loans without consulting anyone in the firm’s Regulatory Reporting Group – the unit at Schwab responsible for net capital calculations and regulatory reporting. The Treasury Group only first considered whether the loans might impact the firm’s net capital and consulted the Regulatory Reporting Group after making the third loan, according to FINRA. FINRA acknowledged that Schwab self-reported the net capital deficiencies to the Securities and Exchange Commission on that same day. Schwab was also charged by FINRA with not having a “supervisory system reasonably designed to achieve compliance” with the applicable SEC net capital rule because the firm did not have a supervisory system or written procedures that required its Treasury Group to consult its Regulatory Reporting Group regarding loans made to its parent corporation.