Aegis Capital Corp. (CRD No. 15007), a New York based broker dealer, was recently fined $950,000 by FINRA over allegations of improper sales of billions of shares of unregistered penny stocks and anti-laundering supervisory lapses. Furthermore, two former chief compliance officers were also fined and suspended in connection with this penny stock scheme.
According to FINRA’s Disciplinary and Other FINRA Actions publication, Aegis Capital Corp., along with representatives, Charles D. Smulevitz (CRD No. 5099387) and Kevin C. McKenna (CRD No. 1343870), allegedly liquidated nearly 3.9 billion shares of five unregistered penny stocks that seven customers deposited into their accounts at the firm. According to FINRA, most shares have to be registered with the SEC to ensure that potential investors are able to receive facts about the issuers. However, allegations stated that the shares were not registered with the SEC nor were the transactions exempt from registration.
As a result of the illicit sales conducted by Aegis Capital Corp. and its representatives, the customers allegedly generated over $24.5 million in proceeds and Aegis collected over $1.1 million in commissions, according to FINRA. (See FINRA Disciplinary Proceeding No. 2011026386001)
Charles D. Smulevitz has been registered with the following member firm(s):
UBS FINANCIAL SERVICES INC.
(CRD# 8174)
NEW YORK, NY
07/2012 – 04/2013
AEGIS CAPITAL CORP.
(CRD# 15007)
NEW YORK, NY
06/2009 – 07/2012
CASIMIR CAPITAL L.P.
(CRD# 105061)
NEW YORK, NY
04/2006 – 06/2009
Kevin C. McKenna has been registered with the following member firm(s):
MORGAN STANLEY SMITH BARNEY
(CRD# 149777)
NEW YORK, NY
06/2009 – 02/2010
MORGAN STANLEY & CO. INCORPORATED
(CRD# 8209)
NEW YORK, NY
04/2007 – 06/2009
MORGAN STANLEY DW INC.
(CRD# 7556)
NEW YORK, NY
12/2006 – 04/2007
VANDERBILT SECURITIES, LLC
(CRD# 5953)
MELVILLE, NY
01/2006 – 12/2006
METLIFE SECURITIES INC.
(CRD# 14251)
NEW YORK, NY
08/2005 – 01/2006
METROPOLITAN LIFE INSURANCE COMPANY
(CRD# 4095)
NEW YORK, NY
08/2005 – 01/2006
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(CRD# 7691)
NEW YORK, NY
10/1988 – 06/2004
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