Aegis Capital Corp. is a FINRA (Financial Industry Regulatory Authority) registered broker-dealer and investment adviser firm with headquarters in New York City. The company has 23 branch offices and more than 350 registered representatives and became a FINRA member in 1984.
Aegis Capital Corp. has been investigated by regulators several times and has been subject to related disciplinary actions. Their publicly-available Financial Industry Regulatory Authority (FINRA) BrokerCheck report lists 37 disclosures.
Allegations Of Aegis Churning Accounts
Recently Aegis settled claims with FINRA, over alleged rule violations regarding churning customer accounts, in a Letter of Acceptance, Waiver, and Consent (AWC) in which Aegis does not admit or deny FINRA’s findings.
Churning or trading excessively is when a broker buys and sells in their client’s account to generate commissions for themselves rather than to benefit the client. Churning is a violation of FINRA’s rules and securities laws, and one of the most common causes for investors to file arbitration claims.
Brokers are supposed to have a “reasonable basis” for recommending transactions in a client’s account so that the transactions are suitable for the investor’s needs and goals.
The AWC submitted to FINRA states that Aegis did not have an adequate supervisory system to supervise and prevent excessive, unsuitable trading. Aegis allegedly did not recognize excessive trading in hundreds of customer accounts, causing in millions of dollars of losses for customers.
The AWC also states that a significant number of Aegis’ registered representatives have disclosures on their FINRA report for personal financial issues.
Additional Fixed Commission Fees
Silver Law Group has investigated the fees, markups, and commissions that Aegis has charged, and found that investors were charged additional commissions and other charges for trades with COR Clearing.
The Securities and Exchange Commission (SEC) requires that brokers charge only fair and reasonable fees, though what is fair may not be black and white. The fees an investor is charged are vitally important to understand because they can dramatically impact the return of the portfolio.
Aegis Accused Of Facilitating Penny Stock Scheme
FINRA alleges that from 2009 to 2011 Aegis did not identify allegedly fraudulent transactions that created $24.5 million profits, as well as over $1 million in commissions for Aegis, from unregistered penny stocks. It is alleged that Aegis’ compliance department did not report or detect the signs of suspicious activity.
Recovering Aegis Investment Losses
Disputes with firms such as Aegis have to be brought to FINRA’s arbitration forum. Investors may be able to recover losses from excessive trading, unreasonable fees, unsuitable recommendations, lack of due diligence, and other causes.
Silver Law Group’s nationally-recognized attorneys represent investors nationwide in securities arbitration claims against Wall Street firms. Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice. Contact Scott for a no-cost consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.