Aug 14 The U.S. Securities and Exchange
Commission said it charged brokerage Linkbrokers Derivatives LLC
for taking profits of more than $18 million from customers by
secretly manipulating the cost of securities trades processed by
The New York-based firm, which ceased acting as a
broker-dealer in April 2013, has agreed to pay $14 million to
settle the charges, the SEC said in a statement.
The regulator had previously charged four brokers at the
firm's cash equities desk. Three of them later agreed to settle
those charges for about $4 million.
The SEC said on Thursday brokers at the firm defrauded
customers by promising very low commission fees, but charging
fees that in some cases were more than 1,000 percent greater
than represented, the SEC said. (1.usa.gov/1rbXBT6)
"These brokers hid the true size of the fees they were
collecting by misrepresenting the price at which they had bought
or sold securities on behalf of their customers," the SEC said.
The scheme involved more than 36,000 transactions between
2005 and February 2009, the SEC said.
"Linkbrokers employees engaged in a devious and abusive
trading scheme orchestrated to steal from the firm's
unsuspecting customers," said Daniel Hawke, chief of the SEC
Enforcement Division's market abuse unit.
"(The) settlement strips Linkbrokers of its remaining assets
and allows those funds to be returned to harmed customers," said
Linkbrokers has settled without admitting or denying
wrongdoing and will withdraw its broker-dealer registration, the
(Reporting By Neha Dimri in Bangalore; Editing by Saumyadeb