Aura Financial Services Hit with Multiple Regulatory Charges
The SEC recently charged Alabama broker-dealer Aura Financial Services, Inc., and six registered representatives with churning of customer accounts, supervisory failures, and other securities violations that resulted in significant harm to clients and substantial profit to the firm. From roughly 2005 through April 2009, these brokers and broker dealer were allegedly involved in a scheme using fraudulent sales practices and high-pressure sales tactics to convince customers to open and invest money in Aura brokerage accounts. These accounts were subsequently churned and incurred excessive commissions and fees resulting in approximately $1 million in revenue to the firm while largely depleting the customers’ account balances through trading losses and excessive transaction costs.
According to the SEC, Aura failed to adopt appropriate procedures, failed to enforce rules, failed to conduct branch office inspections, failed to maintain files and failed to follow up on customer complaints. A former registered rep with Aura was also charged with unauthorized trading for trading an account after the death of the trustee.
The SEC’s complaint, filed in the U.S. District Court for the Southern District of Florida charges six current and former Aura registered representatives located in branch offices in Florida and New York. The SEC is seeking preliminary injunctions against Aura and four of the six brokers still associated with Aura for violations of federal securities laws. The SEC is seeking court orders permanently prohibiting all the defendants from engaging in future violations of the federal securities laws and requiring the defendants to disgorge their ill-gotten gains and pay financial penalties.
The Alabama Securities Commission (ASC) also issued an order to show cause against Aura alleging that Aura and three of its managers violated their supervisory and compliance responsibilities under the Alabama securities laws. The order to show cause gives the broker-dealer 28 days to show cause to the ASC as to why its registration as a broker-dealer and agent in Alabama should not be revoked. According to the ASC, many of the firm’s representatives had criminal or disciplinary backgrounds and multiple prior customer complaints.
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions, and have aided clients who have been the victims of financial adviser abuse and scams. Page Perry’s attorneys are actively involved in counseling institutional and individual investors regarding their investment problems. For further information, please contact us.
