SEC charges Birmingham B-D with churning

The Securities and Exchange Commission and the Alabama Securities Commission announced today that they have charged Aura Financial Services Inc., a Birmingham-based broker-dealer, with churning customer accounts, supervisory failures and other violations.
JUN 12, 2009
By  Sue Asci
The Securities and Exchange Commission and the Alabama Securities Commission announced today that they have charged Aura Financial Services Inc., a Birmingham-based broker-dealer, with churning customer accounts, supervisory failures and other violations. Several of the firm’s senior officers and six registered representatives are included in the complaint. Churning occurs when a broker engages in excessive trading without regard to the customer’s investment objectives for the purpose of generating commissions and other revenue. The SEC’s complaint, filed in U.S. District Court for the Southern District of Florida, alleges that Aura and six registered representatives used fraudulent sales practices and high-pressure sales tactics to convince customers to open and invest money in brokerage accounts, which the brokers subsequently churned. The firm and brokers received $1 million in commissions and fees while they depleted the customers’ accounts, the SEC alleges. For its part, the ASC alleged in an amended order that many of the firm’s representatives had criminal or disciplinary backgrounds and multiple prior customer complaints. Nonetheless, Aura and three of its managers failed to adopt appropriate procedures, enforce rules, conduct branch office inspections or maintain files of complaints, according to the statement. The order gives Aura 28 days to show cause as to why its registration as a broker-dealer should not be revoked or suspended in the state. The SEC is seeking court orders permanently prohibiting all the defendants from engaging in violations of the anti-fraud provisions of the federal securities laws and requiring them to disgorge their ill-gotten gains and pay financial penalties. The SEC’s and the ASC’s investigations continue. A spokeswoman for Aura Financial was not immediately available for comment.

Latest News

Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says
Married retirees could be in for an $18,100 Social Security cut by 2032, CRFB says

A new analysis finds long-running fiscal woes coupled with impacts from the One Big Beautiful Bill Act stand to erode the major pillar for retirement income planning.

SEC bars New Jersey advisor after $9.9M fraud against Gold Star families
SEC bars New Jersey advisor after $9.9M fraud against Gold Star families

Caz Craffy, whom the Department of Justice hit with a 12-year prison term last year for defrauding grieving military families, has been officially exiled from the securities agency.

Navigating the great wealth transfer: Are advisors ready for both waves?
Navigating the great wealth transfer: Are advisors ready for both waves?

After years or decades spent building deep relationships with clients, experienced advisors' attention and intention must turn toward their spouses, children, and future generations.

UBS Financial loses another investor lawsuit involving Tesla stock
UBS Financial loses another investor lawsuit involving Tesla stock

The customer’s UBS financial advisor allegedly mishandled an options strategy called a collar, according to the client’s attorney.

Trump's one big beautiful bill reshapes charitable giving for donors and advisors
Trump's one big beautiful bill reshapes charitable giving for donors and advisors

An expansion to a 2017 TCJA provision, a permanent increase to the standard deduction, and additional incentives for non-itemizers add new twists to the donate-or-wait decision.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.