Broker Must Cough up $14 Million to SEC

WASHINGTON (CN) - The SEC on Thursday accused a New York brokerage firm, Linkbrokers Derivatives, of taking $18 million in illegal profits from customers by adding hidden markups and markdowns to their trades.
     In its cease-and-desist order the SEC says that "certain employees of Linkbrokers" - four of whom it names - charged customers as much as 10 times more than they represented.
     "The scheme was devious and difficult for Linkbrokers' customers to detect, in part because the Linkbrokers Team selectively engaged in it when the volatility in the market was sufficient to conceal the fraud from the customer," the SEC said in its administrative order. "The Linkbrokers Team fraudulently charged customers over $18 million, representing approximately 40 percent of the Cash Desk's earnings generated for Linkbrokers during the relevant time period."
     The SEC sued the four named brokers - Marek Leszczynski, Benjamin Chouchane, Gregory Reyftmann, and Henry Condron - in 2012. Leszczynski, Choucane and Condron settled -Leszczynski for $1.5 million, Chouchane for $2.5 million, and Condron for $208,000, the SEC said in January this year.
     Lnszczynski, Chouchane and Condron were also charged criminally.
     Reyftmann, who supervised the others, was charged civilly, but not criminally.
     Linkbrokers agreed to pay $14 million to settle the charges, the SEC said Thursday.