The US Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the US Treasury Department’s Financial Crimes Enforcement Network are investigating brokerage firm Aegis Capital Corp. The reason for the probe has not been disclosed.
In Aegis Capital’s latest audited financial statement, the firm said that it has responded to the joint inquiry. A lawyer for the broker-dealer said that it would not comment further. The attorney, however, did note that regulators have yet to file a complaint and that Aegis Capital is not in litigation at the moment with any of these agencies.
According to Aegis Capital’s BrokerCheck profile, the firm has 27 previous disclosures, including one in 2015 that the broker-dealer settled with FINRA, agreeing to pay $950K over the allegedly improper sales of billions of unregistered penny stock shares and purported lapses in anti-money-laundering supervision. Two ex-Aegis Capital chief compliance officers were suspended and ordered to pay related fines.
FINRA said that from 4/2009 to 6/2011, the broker-dealer liquidated close to 3.9B shares of five unregistered penny stocks that should have been registered. The regulator partially attributed the violations that occurred due to a lack of proper supervision by Aegis Capital and the two chief compliance officers.
In 2015, the SEC charged a former Aegis representative, Malcolm Segal, with bilking clients of over $3M while working as an advisor with Aegis Capital. Prosecutors also criminally charged him on multiple counts of wire fraud and mail fraud. The clients thought they were investing in CDs and Segal raised about $15.5M from more than four dozen investors, running his scam in Ponzi-like fashion.
Securities Cases
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Aegis Capital’s Annual Audited Report< SEC (PDF)
FINRA Fines Aegis Capital Corp. $950,000 for Sales of Unregistered Penny Stocks and AML Violations, FINRA, August 3, 2015
Financial Crimes Enforcement Network (FINCEN)