Aegis Capital assessed $1.3 million for SAR filing failures
The Securities and Exchange Commission and the Financial Industry Regulatory Authority have announced fines assessed on Aegis Capital Corporation, a New York-based brokerage firm that has admitted that it failed to file suspicious activity reports on numerous suspicious transactions. The SEC’s order found that Aegis failed to file SARs on suspicious transactions that raised red flags indicating the transactions were potentially related to the market manipulation of low-priced securities. FINRA's order was issued to the firm for its failing to have adequate supervisory and anti-money laundering (AML) programs tailored to detect "red flags" or suspicious activity connected to its sale of low-priced securities. Under the SEC order, Aegis agreed to pay a $750,000 penalty and retain a compliance expert. FINRA's settlement with Aegis includes an additional $550,000 penalty.
In a separate settled order, Aegis’ former anti-money laundering (AML) compliance officer Kevin McKenna was found to have aided and abetted the firm’s violations. Aegis CEO Robert Eide was found to have caused them. Without admitting or denying the SEC’s findings, Eide and McKenna agreed to pay penalties of $40,000 and $20,000, respectively. McKenna also agreed to a prohibition from serving in a compliance or AML capacity in the securities industry with a right to reapply. In a litigated order, the Enforcement Division alleges that another former Aegis AML compliance officer, Eugene Terracciano, failed to file SARs on behalf of Aegis. Terracciano is alleged to have aided and abetted and caused Aegis’ violations. The matter pertaining to Terracciano will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating whether the Enforcement Division has proven the allegations in the order and what, if any, remedial actions are appropriate.