Finra has expelled an investment firm in Southfield, Mich., for inappropriate practices that occurred in its retail foreign-currency business and repeated violations of registration and related rules, according to a statement.
Finra has expelled an investment firm in Southfield, Mich., for inappropriate practices that occurred in its retail foreign-currency business and repeated violations of registration and related rules, according to a statement.
The Financial Industry Regulatory Authority Inc. of New York and Washington expelled Maximum Financial Investment Group Inc. and Christopher T. Paganes, the firm's chief executive and chief compliance officer, last week. He is now barred from ever serving in any principal capacity at a securities firm.
Finra found that in September 2007, Maximum entered into an agreement with a non-registered entity to participate in retail foreign-currency-trading practices. From January through May 2008, the firm took in more than $15 million in customer funds to be used for these transactions, according to Finra.
The receipt of the funds created a liability for Maximum that it failed to record on its books, Finra added. That caused the firm to have insufficient minimum net capital — a violation of federal securities laws and Finra rules.
Maximum also failed to establish systems and procedures to monitor for money laundering while engaging in foreign-currency transactions, Finra reported.
In the settlement, the firm and Mr. Paganes neither admitted nor denied the charges but consented to the Finra findings, according to the statement.
“We have no comment on the settlement involving Mr. Paganes,” said Robert Bertsch, an attorney at Bertsch & Associates PC of Port Washington, N.Y., who said that he is representing Mr. Paganes.
A phone call to Maximum seeking comment wasn't returned.
E-mail Sue Asci at sasci@investmentnews.com.
