CEO Pays $700,000, Admits Wrongdoing, and Cooperates


The former CEO of a brokerage subsidiary agreed to pay over $700,000 in disgorgement and interest and admit wrongdoing for condoning illegal conduct involving routing trades to offshore affiliates in order to collect undisclosed and unearned trading profits.

The SEC previously charged ConvergEx Group subsidiaries, which paid $107 million and admitted wrongdoing to settle the charges. The SEC also charged two former employees in that enforcement action, and later separately filed a case against a different former ConvergEx subsidiary CEO that is pending in federal court.

The defendant was also barred from the securities industry and agreed to cooperate with the SEC's ongoing investigation. He may also be subject to further penalties, which the SEC would determine at a later date. The SEC complaint asserts that the defendant knew about the illegal activity, encouraged it, and helped to conceal it. The SEC's Associate Enforcement Director, Stephen L. Cohen, admonished "Senior executives cannot permit deceptive practices by their subordinates." The firm itself previously agreed to pay over $100 Million and admit wrongdoing to settle the charges.