Thursday, January 6, 2011
The SEC and Paul George Chironis, a Long Island, N.Y.-based broker, agreed to settle charges against him for defrauding a congregation of mostly elderly nuns in the Bronx. The SEC found that he churned two accounts owned by the Sisters of Charity — one account with money for care of nuns in assisted-living facilities and a second account to support the nuns' charitable endeavors. Chironis was formerly affiliated with Capital Growth Financial, Inc., a broker-dealer firm that was based in Boca Raton, Fla., and is no longer in business.
Chironis agreed to pay $350,000 to the Sisters of Charity in the SEC settlement.
The SEC's order specifically found that during a 13-month period, the Sisters of Charity's accounts paid approximately 10.8 percent of their value to Chironis in transaction fees. The nuns' accounts were charged an average markup of 3.68 percent on 46 bond purchases including mortgage-backed securities, and 3.03 percent on 33 closed-end bond fund purchases. The congregation's accounts also were being charged an average markdown of 1.92 percent on 67 bond sales and 1.86 percent on 15 closed-end bond fund sales.