UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-83013, IA Release 40- 4882 / April 9, 2018: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Troy C. Baldridge ("Respondent"). The Commission finds that on December 13, 2016, Baldridge pleaded guilty to one count of mail fraud in violation of 18 U.S.C. § 1341 before the United States District Court for the Eastern District of Virginia, in United States v. Troy C. Baldridge, Case No. 3:16-cr-00148. On March 13, 2017, the Court sentenced Baldridge to 41 months imprisonment followed by three years of supervised release, and ordered Baldrige to pay restitution. The stipulated facts to which Baldridge pleaded guilty included, among other things, that from September 2011 through July 2016, Baldridge misappropriated at least $505,665.13 from Capitol Securities Management, Inc. clients, that on at least 15 occasions, he transferred funds from client investment accounts to his own bank accounts for his personal use, without notice to or consent from those clients, that he forged client signatures to effectuate these transactions when necessary, and that he lied to clients who inquired as to the unauthorized transactions.

Order

Bar (Permanent)

association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

4/9/2018

participating in any offering of a penny stock

Indefinite

4/9/2018

MAIL FRAUD

Pled guilty

FINRA

Respondent Baldridge failed to respond to FINRA request for information.

Letter

Bar (Permanent)

All Capacities

Indefinite

12/12/2016

Pursuant to FINRA Rule 9552(h) and in accordance with FINRA's Notice of Suspension and Suspension from Association letters dated September 8, 2016 and October 3, 2016, respectively, on December 12, 2016, Baldridge is barred from association with any FINRA member in any capacity. Respondent failed to request termination of his suspension within three months of the date of the Notice of Suspension; therefore, he is automatically barred from association with any FINRA member in any capacity.

Capitol Securities Management, Inc.

Discharged

Check Fraud

THE CLIENTS OMPLAINED THERE WAS A MISCOMMUNICATION IN REGARD TO APPLYING FOR VARIABLE LIFE INSURANCE COVERAGE TO FUND AN IRREVOCABLE TRUST. THE MISCOMMUNICATION RELATED TO THEIR APPROVAL IN THE UNDERWRITING PROCESS LED TO DELAYS WHICH RESULTED IN A CHANGE IN HEALTH STATUS AND AN INCREASE IN REQUIRED PREMIUM FROM $22,000 TO $82,000. THE CLIENT HAS ACCEPTED THE CONTRACT TO PROTECT THEIR ESTATE AND SIMULTANEOUSLY SUBMITTED A CLAIM TO REDUCE THE PREMIUM.

$55,000.00

$55,000.00

THE CLIENT AGREED TO A SETTLEMENT OFFER TO REISSUE THE VARIABLE LIFE INSURANCE POLICY WITH THE UNDERWRITING CALSSIFICATION VERBALLY COMMUNICATED TO THE CLIENT PRIOR TO THE DELAYS AND SUBSEQUESNT CHANGE IN THE CLIENT'S HEALTH STATUS. THERE WAS NO MONETARY SETTLEMENT PER SE, BUT A CHANGE IN THE UNDERWRITING CLASSIFICATION OF THE POLICY, THUS RESULTING IN A REDUCED PREMIUM FROM APPROXIMATELY $82,000 TO $27,000 IN YEAR ONE OF THE POLICY.