B-Ds slammed for fraudulent auction practices
The SEC has filed settled enforcement actions against two B-D firms and their CEOs for fraudulent auction practices.
The Securities and Exchange Commission today filed settled enforcement actions against two broker-dealer firms and their CEOs for fraudulent auction practices.
Philadelphia-based Regional Brokers, Inc., its CEO Patrick Lubin, Cherry Hill, N.J.-based D.M. Keck & Company, Inc., its CEO Donald Michael Keck and a supervisor, Patricia Ann Sealaus were named in the action, and consented to the issuance without admitting or denying the accusations.
The companies and CEOs were charged with violating and/or aiding and abetting violations of the antifraud and books and records provisions of the federal securities laws, and various Municipal Securities Rulemaking Board rules.
The SEC says the firms served as broker’s brokers in auctions, providing brokerage services exclusively for municipal securities dealers, but would fraudulently place cover bids, accept late bids, disseminate fake bids in its auctions, and also failed to maintain proper books and records.
The SEC imposed a $100,000 penalty against Regional and a $50,000 civil money penalty against Mr. Lubin.
It also placed a permanent supervisory bar and a one-year associational bar against him, and will require Regional to certify with the SEC within six months of implementing new procedures in order to supervise the firm’s conduct.
Mr. Keck received a $15,000 civil money penalty, a five-year supervisory bar and a one-year associational bar. Ms. Sealaus received a five-year supervisory bar.
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