Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, December 29, 2010

FINRA Expels Texas Firm for Excessive Mark-ups

FINRA expelled APS Financial Corporation, located in Austin, Texas, barred the firm's former President, George Conwill, and barred Peter Aman, a former broker at the firm, in a scheme which overcharged an elderly investor by $1.2 million.  FINRA found that Aman charged mark-ups ranging from 4.15 percent to fraudulently excessive mark-ups as high as 67 percent when executing 45 transactions for customers of APS Financial. Forty-three of these excessive or fraudulent mark-ups were related to transactions for the accounts of a single elderly investor. Aman overcharged this elderly investor by more than $1.2 million through undisclosed mark-ups, including $767,000 in fraudulently excessive mark-ups.  In total, APS Financial Corporation overcharged customers on 59 transactions. Conwill approved all 53 mark-ups above 5 percent, including 42 of the 43 excessive or fraudulent mark-ups for the elderly investor's accounts.

FINRA also barred Conwill and expelled APS Financial for rule violations relating to trading in corporate high yield bonds, collateralized mortgage obligations and collateralized debt obligations. Both APS Financial and Conwill were cited for charging excessive mark-ups and supervision violations.

APS Financial Corporation, Aman and Conwill settled these matters without admitting or denying the allegations, but consented to the entry of FINRA's findings.

http://lawprofessors.typepad.com/securities/2010/12/finra-expels-texas-firm-for-excessive-mark-ups.html

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