Two regulators fine firm over $1 million in total for failing to file SARs
29 Mar 2018

US-based Aegis Capital Corp has been fined over a million dollars in total by two regulators for failing to file suspicious activity reports (SARs) on numerous occasions.

According to the US Security and Exchange Commission (SEC), 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.

Aegis had violated a SEC financial record-keeping and reporting rule, the SEC said on Wednesday, and it fined the firm $750,000. Aegis also agreed to retain a compliance expert.

The Financial Industry Regulatory Authority (Finra) also fined Aegis $550,000 for failing to have adequate supervisory and anti-money laundering (AML) programs to detect suspicious activity connected to its sale of low-priced securities.

“Aegis failed to adequately monitor or investigate the trading in seven DVP [delivery versus payment] customer accounts that liquidated billions of shares of low-priced securities, generating millions of dollars in proceeds for its customers,” Finra said on Wednesday.

“Several of these customers were foreign financial institutions that affected transactions on behalf of their underlying customers, all of whom were unknown to Aegis. The firm did not identify these trades as suspicious even after its clearing firm alerted Aegis to AML red flags and specific suspicious low-priced securities transactions.”

Aegis Capital said: “The referenced activity occurred more than 4 years ago, related to only seven DVP accounts, and resulted in no harm to any Aegis clients. Aegis has long since exited this business line, and the brokers involved are no longer with the Firm.”

Read more:

Barclays fined $2 billion over US fraud claims

Confessions of a compliance officer: How I handled dodgy demands

UK uses Criminal Finances Act to seize $500 million from HSBC account

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