Broker-dealer Aegis Capital facing investigation from Finra, SEC and FINCEN

An SEC filing did not say why the firm is being investigated and a lawyer for the firm declined to comment

Mar 15, 2017 @ 4:55 pm

By Bruce Kelly

Aegis Capital Corp., a mid-sized broker-dealer based in New York City with 415 registered reps, is being investigated by three regulatory agencies, according to a filing with the SEC.

The Financial Industry Regulatory Authority Inc., the Securities and Exchange Commission and the Treasury Department's Financial Crimes Enforcement Network, or FINCEN, are investigating the broker-dealer, according to the filing.

The filing did not state why Aegis Capital was under investigation.

"The company has provided responses to an inquiry and investigative proceeding brought jointly by Finra, the SEC and FINCEN," according to Aegis Capital's most recent annual audited financial statement, which covered the period of December 1, 2015, to November 30, 2016. "The matter is in the discovery stage and no estimate of the effects of an adverse conclusion, if any, can be made as of the date of this financial statement."

Aegis Capital filed the report with the SEC at the end of January. It typically takes several weeks for an electronic version of a broker-dealer's annual audited financial statement, known as a Focus report, to appear on the SEC website.

A lawyer for Aegis Capital, Michael Ference, said the firm would not comment on any open or ongoing investigations. He added, however, that no complaint had been filed by any of the regulators mentioned in the filing and that Aegis Capital was not currently in litigation with any of the three regulators.

Reps at Aegis Capital work either as independent contractors or employees, depending upon the branch. The firm has 16 branch offices, the majority in New York City or Melville, Long Island.

Opened in 1984, Aegis Capital has 27 disclosures on its BrokerCheck profile. In an August 2015 settlement with Finra, the firm agreed to pay $950,000 over allegations of improper sales of billions of shares of unregistered penny stocks and anti-money- laundering supervisory lapses. Two former chief compliance officers at the firm also were suspended and fined over the charges.

At around the same time, the firm's president and CEO, Robert Eide, was suspended for 15 days and fined $15,000 for failing to disclose more than $640,000 in outstanding liens. Mr. Ference, Aegis Capital's attorney, said at the time that the liens were satisfied years before Finra began its investigation and that Mr. Eide had not been aware of the liens at the time or that he was required to disclose them. Mr. Eide did not return a call to comment.

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