A former broker who was charged with churning by the SEC has agreed to pay $400,000 in fines and penalties to settle the charges, the agency announced.
Laurence M. Torres, a former broker at Alexander Capital LP in New York City, settled the SEC charges, agreeing to pay more than $400,000 in restitution and SEC fines, the SEC said in a press release on Wednesday.
The SEC's complaint against Torres alleged that he had no reasonable basis to believe it was suitable to recommend a high-cost pattern of frequent trading that gave his customers virtually no chance of making even a minimal profit. Torres also engaged in churning and made unauthorized trades.
Without admitting or denying the findings, Torres agreed to be barred from the securities industry and penny stock trading, and he must pay $225,359.36 in disgorgement plus $25,748.02 in interest, and a $160,000 penalty. The SEC identified him as a resident of West Mifflin, Pa., when the complaint was filed.
In September, the SEC filed a civil complaint against Torres and a separate complaint against two other brokers at the firm, William C. Gennity, 30, and Rocco Roveccio, 42, who were accused of generating nearly $500,000 in commissions while costing 11 clients—including one who was disabled—$683,038 in losses. The SEC's litigation against Gennity and Roveccio will proceed in federal district court in Manhattan, the SEC said in a statement.
The complaint against Torres accused him of recommending "a high-cost pattern of frequent trading that he had no reasonable basis to believe would be suitable for eight of his customers or for anyone" between 2012 and 2014. The complaint also said he "churned" client accounts to generate income and engaged in unauthorized trading.
Torres reaped $531,742 in commissions on the trades, while the eight clients saw losses on the trades that ranged from $3,203 to $199,530, the SEC said.