Broker-Dealer Admits It Failed to File SARs
Aegis Capital Corporation admitted to willfully failing to file Suspicious Activity Reports on market manipulation-linked transactions, resulting in $1.3M in combined penalties from the SEC and FINRA, with former compliance officers Kevin McKenna and Robert Eide fined and barred or held responsible, while Eugene Terracciano faces pending administrative charges.
Aegis Capital Corporation willfully violated SEC financial recordkeeping rules by failing to file Suspicious Activity Reports (SARs) on transactions linked to market manipulation of low-priced securities, leading to a $750,000 SEC penalty and a $550,000 FINRA penalty, totaling $1.3 million. The firm also agreed to retain a compliance expert. Former AML officer Kevin McKenna was found to have aided and abetted the violations, paying a $20,000 penalty and accepting a ban from compliance roles with reapplication rights, while CEO Robert Eide paid a $40,000 penalty for causing the failures. Another former AML officer, Eugene Terracciano, is separately alleged to have aided and abetted the SAR failures and faces an upcoming administrative hearing to determine liability.
Aegis Capital Corporation, a New York-based brokerage, admitted to willfully failing to file Suspicious Activity Reports (SARs) on numerous transactions that raised red flags for market manipulation of low-priced securities, violating its anti-money laundering (AML) obligations under SEC rules. As a result, the SEC imposed a $750,000 penalty and required Aegis to retain an independent compliance expert, while FINRA added a $550,000 penalty, bringing the total regulatory fines to $1.3 million. Former AML compliance officer Kevin McKenna was found to have aided and abetted the violations, agreeing to pay a $20,000 penalty and accepting a permanent prohibition from serving in any compliance or AML capacity in the securities industry, though he may reapply after a period. CEO Robert Eide was found to have caused the failures and paid a $40,000 penalty without admitting or denying the allegations. Another former AML officer, Eugene Terracciano, is facing separate administrative charges for allegedly aiding and abetting and causing the SAR failures; his case will proceed to a public hearing before an administrative law judge to determine liability and potential remedies. The SEC’s investigation, conducted with support from FINRA and FinCEN, emphasized the critical role of SARs in detecting financial crime and upholding market integrity. The enforcement actions were led by the SEC’s Broker-Dealer Task Force and Office of Market Intelligence, underscoring heightened regulatory scrutiny of AML compliance failures in brokerage firms.
Exhibits & Attached Documents (3)
Extracted insights
- $750K $750,000 $100K–$1M
- $550K $550,000 $100K–$1M
- $40K $40,000 $10K–$100K
- $20K $20,000 $10K–$100K
- company aegis capital corporation
- person aegis violations
- person aml obligations
- person enforcement division
- person eugene terracciano
- agency Finra
- person george bagnall
- person kevin mckenna
- person robert eide
- agency sec financial recordkeeping and reporting rule
- agency sec investigation
- agency sec order
- Aegis Capital Corporation admitted Failure to File SARs
- SEC Order found Aegis Failed to File SARs
- Aegis failed to meet AML Obligations
- Aegis violated SEC Financial Recordkeeping and Reporting Rule
- Aegis agreed to pay $750,000 Penalty
- FINRA announced Settlement with Aegis
- Kevin McKenna aided and abetted Aegis Violations
- Robert Eide caused Violations
- Eide and McKenna agreed to pay Penalties of $40,000 and $20,000
- Eugene Terracciano failed to file SARs
- Enforcement Division alleges Eugene Terracciano Failed to File SARs
- George Bagnall conducted SEC Investigation
Aegis Capital Corporation, a New York-based brokerage firm, has admitted that it failed to file Suspicious Activity Reports (SARs) on numerous suspicious transactions. Broker-dealers are required to file SARs for certain transactions suspected to involve fraudulent activity or have no business or apparent lawful purpose. The SEC’s order found that Aegis failed to file SARs on suspicious transactions that raised red flags indicating the transactions were potentially related to the market manipulation of low-priced securities. “Aegis failed to meet its AML obligations to report suspicious activity, including when it was faced with specific information alerting the firm to suspicious transactions,” said Antonia Chion, Associate Director and head of the Broker-Dealer Task Force of the SEC’s Enforcement Division. “Given the critical importance of SARs to the regulatory and law enforcement community, brokerage firms must comply with their SAR reporting obligations.” The SEC’s order found that Aegis willfully violated an SEC financial recordkeeping and reporting rule. Aegis agreed to pay a $750,000 penalty and retain a compliance expert. FINRA also announced a settlement with Aegis today that includes an additional $550,000 penalty. In a separate settled order, Aegis’ former anti-money laundering (AML) compliance officer Kevin McKenna was found to have aided and abetted the firm’s violations. Aegis CEO Robert Eide was found to have caused them. Without admitting or denying the SEC’s findings, Eide and McKenna agreed to pay penalties of $40,000 and $20,000, respectively. McKenna also agreed to a prohibition from serving in a compliance or AML capacity in the securities industry with a right to reapply. In a litigated order, the Enforcement Division alleges that another former Aegis AML compliance officer, Eugene Terracciano, failed to file SARs on behalf of Aegis. Terracciano is alleged to have aided and abetted and caused Aegis’ violations. The matter pertaining to Terracciano will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating whether the Enforcement Division has proven the allegations in the order and what, if any, remedial actions are appropriate. The SEC’s investigation was conducted by George Bagnall and supervised by Antonia Chion with assistance from Daniel Goldberg, Damon Reed, Andrae Eccles, and David Cohen of the Enforcement Division’s Office of Market Intelligence Bank Secrecy Act Review Group. The litigation will be led by Daniel Maher and Nicholas Margida and supervised by Cheryl Crumpton. The SEC’s examination that led to the enforcement referral in this matter was conducted by Terrence Bohan, Edward Janowsky, and Paul Pocress and supervised by Steven Vitulano of the New York office. The SEC appreciates the assistance of FINRA and the Financial Crimes Enforcement Network.
Aegis Capital Corporation, a New York-based brokerage firm, has admitted that it failed to file Suspicious Activity Reports (SARs) on numerous suspicious transactions. Broker-dealers are required to file SARs for certain transactions suspected to involve fraudulent activity or have no business or apparent lawful purpose. The SEC’s order found that Aegis failed to file SARs on suspicious transactions that raised red flags indicating the transactions were potentially related to the market manipulation of low-priced securities. “Aegis failed to meet its AML obligations to report suspicious activity, including when it was faced with specific information alerting the firm to suspicious transactions,” said Antonia Chion, Associate Director and head of the Broker-Dealer Task Force of the SEC’s Enforcement Division. “Given the critical importance of SARs to the regulatory and law enforcement community, brokerage firms must comply with their SAR reporting obligations.” The SEC’s order found that Aegis willfully violated an SEC financial recordkeeping and reporting rule. Aegis agreed to pay a $750,000 penalty and retain a compliance expert. FINRA also announced a settlement with Aegis today that includes an additional $550,000 penalty. In a separate settled order, Aegis’ former anti-money laundering (AML) compliance officer Kevin McKenna was found to have aided and abetted the firm’s violations. Aegis CEO Robert Eide was found to have caused them. Without admitting or denying the SEC’s findings, Eide and McKenna agreed to pay penalties of $40,000 and $20,000, respectively. McKenna also agreed to a prohibition from serving in a compliance or AML capacity in the securities industry with a right to reapply. In a litigated order, the Enforcement Division alleges that another former Aegis AML compliance officer, Eugene Terracciano, failed to file SARs on behalf of Aegis. Terracciano is alleged to have aided and abetted and caused Aegis’ violations. The matter pertaining to Terracciano will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating whether the Enforcement Division has proven the allegations in the order and what, if any, remedial actions are appropriate. The SEC’s investigation was conducted by George Bagnall and supervised by Antonia Chion with assistance from Daniel Goldberg, Damon Reed, Andrae Eccles, and David Cohen of the Enforcement Division’s Office of Market Intelligence Bank Secrecy Act Review Group. The litigation will be led by Daniel Maher and Nicholas Margida and supervised by Cheryl Crumpton. The SEC’s examination that led to the enforcement referral in this matter was conducted by Terrence Bohan, Edward Janowsky, and Paul Pocress and supervised by Steven Vitulano of the New York office. The SEC appreciates the assistance of FINRA and the Financial Crimes Enforcement Network.