New York-based brokerage Aegis Capital Corporation has agreed to pay $750,000 to the Securities and Exchange Commission as well as $550,000 to the Financial Industry Regulatory Authority over claims it ignored red flags on suspicious transactions involving low-priced securities. The SEC claims the firm failed to file Suspicious Activity Reports, while FINRA found that the firm’s supervisory system for delivery versus payment (DVP) accounts was inadequate. According to FINRA, DVP accounts are for trading securities not held at the brokerage firm. “During its investigation, FINRA found that Aegis failed to adequately monitor or investigate the trading in seven DVP customer accounts that liquidated billions of shares of low-priced securities, generating millions of dollars in proceeds for its customers,” FINRA said. “Several of these customers were foreign financial institutions that effected 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.”
Louisiana Financial Advisor Pleads Guilty to Defrauding Investors
Image courtesy of Ken Teegardin
A financial advisor from Mandeville, La., pleaded guilty to stealing up to $1.5 million from his clients, NOLA.com reports. Ralph Willard Savoie, 70, defrauded investors for more than three years beginning in 2013. He told his clients he would invest their money in securities and insurance, and to develop industrial cooling towers, guaranteeing high rates of return, describing the investments as a “sure thing.” Instead, Savoie spent the money on jewelry, hotels, restaurants, personal credit cards, car payments and rent. He also used client money on a “risky real estate venture” and to pay back clients who previously invested their money with him. He faces a “significant” prison term along with fines, forfeitures and restitution orders following his conviction of wire fraud, U.S. Attorney Brandon J. Fremin’s office said. No sentencing date has been set.
Envestnet Launches Quick Start for Breakaway Advisors
Envestnet’s Tamarac reporting software for registered investment advsiors can now get any firm’s portfolio management solution up and running within 30 days. Tamarac's new Quick Start offering is “especially beneficial for firms that need to scale as soon as possible and establish their business operations,” Envestnet Tamarac President Stuart DePina said. Breakaway advisors and firms are most vulnerable during the transition period, so the faster they can establish their new practice and begin working, the better.