Alexander Capital, censured by SEC, will pay $411,000 for failure to supervise
Regulator says firm ignored churning by three reps who have been charged with fraud
The Securities and Exchange Commission has censured Alexander Capital, a New York-based broker-dealer, and charged two of its managers with failing to supervise three brokers who churned accounts and made unsuitable recommendations and unauthorized trades.
Alexander Capital agreed to pay $193,775 of allegedly ill-gotten gains, $23,437 in interest, and a $193,775 penalty, which will be placed in a fund to be returned to harmed retail customers, the SEC said in a release.
The SEC said that Alexander Capital failed to reasonably supervise William C. Gennity, Rocco Roveccio and Laurence M. Torres, whom the SEC charged with fraud in September 2017. Had the firm put in place “reasonable supervisory policies and procedures and systems to implement them,” it likely would have prevented and detected the brokers’ wrongdoing. the SEC said.
In separate orders, the SEC found that supervisors Philip A. Noto II and Barry T. Eisenberg ignored red flags indicating excessive trading and failed to supervise the brokers, which would have detected their securities-law violations. The SEC’s order against Mr. Noto said that he failed to supervise two brokers and its order against Mr. Eisenberg said he failed to supervise one broker.
Mr. Noto agreed to a permanent supervisory bar and to pay a $20,000 penalty and Mr. Eisenberg agreed to a five-year supervisory bar and to pay a $15,000 penalty. The penalties will be paid to harmed retail customers.
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