New York-based Aegis Capital Corp. has agreed to pay $25,000 after the Financial Industry Regulatory Authority found it failed to buy and sell municipal bonds at a fair and reasonable price for its customers, violating multiple municipal securities rules.
The firm agreed this week to pay those fines and be censured while neither admitting nor denying FINRA’s findings that it violated Municipal Securities Rulemaking Board Rules G-30, on prices and commission, and Rule G-17 on fair dealing when it failed to buy and sell muni bonds at prices that were fair and reasonable.
That happened from October 2017 through March 31, 2018, according to FINRA. During that time, the regulator found, Aegis also violated MSRB Rule G-18, on best execution, for failing to conduct reasonably designed annual reviews of its policies and procedures for finding the best available market for carrying out its customers’ transactions to see whether its procedures were reasonably designed to achieve best execution, FINRA said.
“Specifically, Aegis sold to its customers at prices that were approximately 40% away from the relevant market,” FINRA said.
The firm then also violated MSRB Rule G-27 on supervision by not establishing and maintaining written supervisory procedures, according to FINRA.
Aegis’ also didn’t have written policies and procedures to find the best inter-dealer market for a security in the absence of pricing information or multiple quotes, FINRA said.
“Specifically, the firm’s procedures restate the rule’s requirements, provide some limited guidance, and set forth relevant order handling procedures,” FINRA said. “The procedures, however, fail to describe specific order handling steps the firm will take to address how it will determine the best inter-dealer market in the absence of pricing or multiple quotation information.”
Most of the total $80,000 fine was for violating FINRA rules in connection with corporate bonds.
Aegis and the firm’s lawyer did not respond to a request for comment.
Aegis has been a FINRA member firm since July 1984 and employs 325 registered representatives among 23 branches.
