FINRA Suspends Aegis Capital Broker Kishan Parikh Over Churning

Kishan Parikh (CRD#:5506554, aka “Sean Parikh”) is a previously registered broker whose last employer was Aegis Capital Corp. (CRD#:15007) of New York, NY. His previous employer was Max International Broker/Dealer Corp. (CRD#:46039), also of New York City, was expelled by FINRA on 1/29/2013. He has been in the industry since 2008.

FINRA’s Department of Enforcement filed a complaint against Parikh alleging unsuitable recommendations and excessive trading that led to over $33,000 in losses while generating considerable commissions, including $89,000 for himself. Although none of the accounts were discretionary accounts, Parikh traded as if they were. Therefore, he had de facto control over all his customer accounts.

Parikh recommended active short-term trading to these customers with the use of a margin. He failed to consider the costs associated with this type of trading, nor the interest use cost associated with using the margin. This allowed him to trade more often but at a higher cost to the customers. Kishan Parikh also executed trades for two of his customers that had a total principal value of $4.2 million, and that he did not call the customers on the date of the trades.

None of the customers were seasoned investors and relied on his expertise to make the best decisions. Two of these investors were over the age of 65.

Parikh voluntarily terminated his employment with Aegis Capital on April 3, 2019. FINRA served Parikh with the complaint by mail on March 17, 2021, and requested an answer by April 19, 2021. When he failed to answer the first notice, FINRA again served him on April 20, 2021, requesting an answer by May 7, 2021. Parikh again failed to respond to the complaint, he defaulted, and the allegations in the complaint are considered “admitted.”

FINRA issued the following sanctions:

Administrative penalty of $10,000
Client restitution of $40,919.00
Eighteen-month suspension from 8/16/2021 through 2/15/2023 for the violation of FINRA Rules 2111 and 2010, for excessive trading and other “aggravating factors” outlined in the petition
Six-month suspension for FINRA Rule 2010 for unauthorized trading, to be served consecutively with the previous suspension

The default decision was rendered on July 7, 2021.

More Trouble For Aegis Capital

In 2018, their internal failings with reporting cost them $1.3 million in fines for four separate incidents. In October, FINRA sanctioned two Aegis brokers for involvement in improper activities.

Once again, Aegis made the news for much the same reason, and for considerably more money. On November 9, 2021, FINRA announced that it had fined Aegis Capital for $1.1 million in addition to ordering $1.7 million in restitution to 68 investors.

The case stems from a customer complaint and FINRA’s examination of the firm. FINRA discovered that Aegis failed to implement a supervisory system that would fulfil FINRA’s suitability rule. The firm could not discover and address unsuitable and excessive trading practices employed by some of its brokers. This includes eight Aegis representatives engaged in excessive trading for 31 client accounts who incurred $2.9 million in trading fees.

The firm appointed two supervisors, Joseph Giordano and Roberto Birardi. They were responsible for six firm representatives and failed to investigate 700 of the 900 exception reports that their clearing firm identified as possible unsuitable trading. Additionally, there were more than 50 customer complaints regarding excessive, unsuitable or unauthorized trading (churning) in their accounts. Aegis also failed to remedy deficiencies with the firm’s policies and systems that monitor excessive trading.

In the settlement, Giordano agreed to a six-month suspension as a supervisor and a $10,000 fine. Birardi agreed to a three-month suspension and a fine of $5,000. Both Birardi and Giordano are required to complete 20 hours of continuing education. FINRA has also settled with four Aegis representatives. Two have been barred for excessive and unauthorized trading and churning. Two other representatives were suspended and fined for excessive trading.

Did You Invest With Kishan Parikh Or Aegis Capital?

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.