Jacko Law Group, PC
Call Today for a Consultation
San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549

Aegis Capital Fined $950,000 by FINRA

downloadAccording to a Financial Industry Regulatory Authority (“FINRA”) complaint, Aegis Capital Corp. (“Aegis”), a New York-based retail and institutional broker-dealer, was found to have committed securities-related misconduct during its time as a FINRA member. FINRA has charged Aegis with improper sales of billions of shares of unregistered penny stocks, and supervisory and anti-money laundering (“AML”) systems and procedures failures. The violations resulted in sales of $24.5 million and $1.1 million in commissions for Aegis.The penny stock sales took place between April 2009 and June 2011 during which time Charles D. Smulevitz and Kevin Mckenna, who successively served as chief compliance officers (“CCOs”), ignored red flags associated with the transactions. For example, Smulevitz and McKenna did not investigate the deposits of unregistered securities, followed shortly thereafter liquidations, that sometimes occurred during periods of suspicious promotional activity and increased trading volume.  According to Brad Bennett, Executive Vice President and Chief of Enforcement, “The compliance officers sanctioned in this case were directly responsible for supervising sales of restricted securities but failed to conduct a meaningful inquiry in the presence of significant red flags indicating the sales could be illicit distributions of unregistered stocks.”  Mr. Smulevitz and Mr. Mckenna have both been fined and suspended without admitting or denying FINRA’s accusations.Mr. Bennet also stated that, “Firms who open their doors to penny stock liquidators must have robust systems and procedures to ensure strict adherence to the registration and AML rules given the significant risk of investor fraud and market manipulation.” Jacko Law Group, PC. (“JLG”) can assist firms with establishing robust AML programs by conducting the required annual audit of AML programs for broker-dealers, review existing programs and recommend changes, respond to enforcement actions and offer on-site testing at both main and branch office locations.For more information on this and other related subjects, please contact us at [email protected] or (619) 298-2880.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Email us to request more information or to schedule an appointment.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

San Diego Office
1350 Columbia Street
Suite 300
San Diego, CA 92101

Toll Free: 866-497-2298
Phone: 213-631-2549
Phone: 619-298-2880
Fax: 619-298-2882
Map & Directions

San Francisco Office
Four Embarcadero Center
Suite 1400
San Francisco, CA 94111

Phone: 213-631-2549
Phone: 415-766-3599
Fax: 619-298-2882
Map & Directions

Los Angeles Office
535 N. Brand Boulevard
Suite 270
Glendale, CA 91203

Phone: 213-631-2549
Fax: 619-298-2882
Map & Directions