Aegis Capital Corp has agreed to pay a fine of $275,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
Since 2019, Aegis has paid several million dollars to its corporate parent. Aegis recorded the payments in its general ledger as expenses for management services.
Although Aegis had a written agreement with its corporate parent, the agreement did not adequately specify the management services to be provided. As a result, Aegis was required to account for the payments as capital withdrawals, but did not do so in more than a dozen net capital computations-albeit without any change to Aegis’s net capital-and FOCUS filings.
By maintaining inaccurate general ledgers, net capital computations, and FOCUS filings, Aegis violated Exchange Act §l 7(a) and Rules 17a-3 and l 7a-5, along with FINRA Rules 4511 and 2010.
Aegis’s failure to supervise recordkeeping of payments to its parent FINRA Rule 3110 requires broker-dealers to establish and maintain a supervisory system, including written supervisory procedures, that is reasonably designed to achieve compliance with applicable securities laws, regulations, and rules.
Since 2019, Aegis’s system, including written procedures, for supervising the preparation of its general ledger, net capital computations, and FOCUS filings was not reasonably designed. Aegis did not have any system or procedures for determining whether payments to its corporate parent should be characterized as distributions, rather than expenses. Aegis also did not have any system for determining how payments to its corporate parent affected Aegis’s net capital computations and FOCUS filings.
Therefore, Aegis violated FINRA Rule 3110 and 2010.
From at least 2014 to July 2025, Aegis allowed an unregistered person to have a supervisory role in its accounting department. She was not registered as an Operations Professional even though she had authority to sign checks and withdraw funds from the firm’s bank accounts, and she supervised and approved most entries in Aegis’s general ledger.
Therefore, Aegis violated FINRA Rules 1210 and 2010 and NASD Rule 1031.
Since July 2025, a person registered as an Operations Professional has performed the functions noted above.
On top of the $275,000 fine, Aegis has agreed to a censure and an undertaking that a member of its senior management who is a registered principal of the firm must certify in writing that the firm has implemented a supervisory system, including written supervisory procedures, that is reasonably designed to achieve compliance with FINRA Rules 3110 and 2010.
