SEC Fines Aegis $1.3 Million for Failure To Report Suspicious Trades

Aegis Capital Corporation fined $1.3 Million 

According to a press announcement today, Aegis Capital Corporation will pay $1.3 million in fines after reportedly admitting it failed to file suspicious activity reports on deals that should have set off red flags for potential money-laundering activity, regulators said.

Robert Eide, sole owner and CEO of Aegis, was reportedly blamed by the SEC for causing the violations by failing to respond to reports of the suspicious activity. The SEC has fined Eide $40,000.

According to the regulator, from at least late 2012 through early 2014, Aegis allegedly  failed to file Suspicious Activity Reports (“SARs”) on hundreds of transactions when it knew, suspected, or had reason to suspect that the transactions involved the use of the broker-dealer to facilitate fraudulent activity or had no business or apparent lawful purpose.

Many of the transactions involved red flags of potential market manipulation, including high trading volume in companies with little or no business activity during a time of simultaneous promotional activity.

Aegis did not file SARs on these transactions even when it specifically identified AML red flags implicated by these transactions in its written supervisory procedures.

The SEC states that the brokerage firm willfully violated SEC reporting and record-keeping rules in failing to report the deals. Aegis has reportedly agreed to pay a $750,000 fine, according to the press release.

FINRA announced a separate settlement in the case in which Aegis agreed to pay $550,000.

In addition to Eide, two other Aegis employees had administrative charges filed against them by the SEC for allegedly being responsible for the disclosure violations.

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