FINRA Fines Aegis Capital Corp. $2.8M For Excessive and Unsuitable Trades
According to The Financial Industry Regulatory Authority (FINRA) today, the regulator has reportedly censured and fined Aegis Capital Corp. $2.8 million, including $1.7 million in restitution to 68 customers whose accounts were allegedly excessively and unsuitably traded by the firm’s representatives. The regulator also imposed a $1.1 million fine for Aegis’s alleged supervisory violations.
FINRA’s findings indicate that Aegis supervisors failed to notice that eight Aegis reps purportedly excessively and unsuitably traded customer accounts between 2014 and 2018, generating $2.9 million in trading costs that would have required the investments to generate more than 71% returns to offset costs.
Aegis allegedly failed to implement a supervisory system reasonably designed to comply with the regulator’s suitability rule. As a result, Aegis failed to identify and address its representatives’ potentially excessive and unsuitable trading in customer accounts, including trading by eight Aegis representatives who excessively traded 31 customers’ accounts, according to FINRA.
FINRA also found that Aegis allegedly failed to act on more than 900 exception reports generated by its clearing firm that identified potentially unsuitable trading and more than 50 complaints from customers alleging excessive and unsuitable or unauthorized trading in their accounts.
Two designated Aegis supervisors purportedly failed to investigate numerous red flags, including 700 of the 900 exception reports. FINRA reached settlements with the individuals, that included supervisory suspensions and fines, as well as completing 20 hours of continuing education.
FINRA also reportedly reached settlements with four Aegis advisors, barring two individuals for churning and excessive and unauthorized trading and suspending and fining two individuals for excessive trading.
The matter stems from an examination of the firm and a review of a customer’s arbitration complaint.
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The foregoing information is all publicly available and provided by the White Law Group. If you are concerned about investments with Aegis Capital Corp., the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.
For more information on the firm’s investigation, please see:
Douglas Szempruch, Aegis Capital Corp. Advisor, Suspended from the Securities…
Ex-Aegis Broker James Schwartz (Jim Schwartz) Barred after Churning Allegations
Aegis Capital Corp. Censured & Fined for Bond Overcharges
Aegis Capital Corp. Customer Complaints & Regulatory Actions
Tags: Aegis Capital Corp FINRA, Aegis Capital corp, Aegis Capital corp excessive trades, Aegis Capital corp failure to supervise, Aegis Capital corp fined, Aegis Capital corp sanctioned, Aegis Capital corp unauthorized trades Last modified: December 21, 2022