SEC Fines Aegis Capital $2.3M Over Allegedly Unsuitable Variable Interest Rate Structured Product Sales
Aegis Brokers in Melville, NY and Boca Raton, FL Allegedly Unsuitably Recommended VRSPs to 48 Customers, Including Elderly Investors
In July 2022, the US Securities and Exchange Commission (SEC) filed civil charges against Aegis Capital Corp., former Managing Director Alan Zelig Appelbaum, and ex-broker Paul Francis Gallivan. They are charged for allegedly unsuitably recommending variable interest rate structured products (VRSPs) to retail customers. These complex, structured products are usually issued only by well-known financial institutions.
According to the Commission’s settled administrative proceeding against Aegis, fourteen of its brokers from its Melville, New York and Boca Raton, Florida branches recommended VRSPs to four dozen customers for whom this type of investment was unsuitable. Without denying or admitting to the regulator’s findings, Aegis will pay a $2.3M penalty and $220K disgorgement plus prejudgment interest.