The Securities and Alternate Fee (SEC) as we speak introduced settled prices towards registered broker-dealer Maxim Group, LLC for violating federal securities legal guidelines governing the execution of brief gross sales and the submission of suspicious exercise reviews (SARs).
To assist detect potential securities regulation and money-laundering violations, broker-dealers are required to file SARs describing suspicious transactions going down via their companies. In accordance with the SEC’s order, from at the least January 2018 via January 2019, Maxim facilitated order move from different broker-dealers engaged within the sale of enormous volumes of shares of low-priced over-the-counter microcap securities however didn’t adequately design or implement its anti-money laundering insurance policies and procedures in order to moderately tackle the dangers related to this enterprise.
The order additional finds that because of these deficiencies, and Maxim’s failure to sufficiently examine crimson flags, Maxim didn’t file SARs for quite a few suspicious transactions.
Additionally, in keeping with the order, Maxim routinely facilitated “not held” lengthy sale orders in low-priced securities from its broker-dealer prospects by executing a sequence of principal brief gross sales all through the day and masking its brief positions by buying the inventory from the broker-dealer buyer at a lower cost. The order finds that Maxim didn’t, nevertheless, “find” shares of the inventory to borrow previous to effecting its brief gross sales as required by the short-selling provisions of Regulation SHO.
The SEC’s order finds that Maxim willfully violated Part 17(a) of the Alternate Act and Rule 17a-8 thereunder, and Rule 203(b)(1) of Regulation SHO underneath the Alternate Act.
With out admitting or denying the SEC’s findings, Maxim consented to a cease-and-desist order and a censure, and agreed to pay a civil cash penalty of $800,000.