(CN) – Long Island stockbroker Paul G. Chironis will pay $350,000 to the Sisters of Charity, a Bronx congregation of elderly nuns he defrauded by churning their accounts, the SEC said. Chironis, 58, of Melville, drained $959,027 from two accounts: one to take care of nuns in assisted-living facilities and a second to support their charitable work, the SEC said.
Chironis “had a devastating impact” on the elderly nuns, draining their accounts of $959,027 in 13 months, while enriching himself, according to the SEC’s cease-and-desist order.
Chironis sucked up 10.8 percent of the nuns’ accounts through his “pattern of abusive trading” and “undisclosed excessive markups and markdowns,” the SEC said in its order.
“Chironis’s irresponsible actions virtually guaranteed the convent’s accounts would lose money due to the undisclosed and excessive costs being incurred while Chironis focused on generating substantial commissions for himself,” the SEC said.
Chironis was formerly affiliated with Capital Growth Financial, a broker-dealer based in Boca Raton, Fla., that is no longer in business, the SEC said.
He agreed to pay a $100,000 penalty and disgorge $250,000 that will be returned to the Sisters of Charity.
“Chironis’ trading had a devastating impact on the accounts, while enriching Chironis,” according to the cease-and-desist order. “In 2007, the accounts had an average combined balance of approximately $8.3 million. During the relevant period, the accounts purchased approximately $20.1 million and sold $18 million worth of securities. The trades cost the accounts $959,027, over 10.8% of their value in 13 months.”
Neither the SEC order nor its press statement explained why the agency settled for $350,000 – $609,027 less than Chironis was accused of draining from the nuns.
It appears to be another case of lax SEC supervision. According to the SEC’s own order: “Prior to his association with Capital Growth, Chironis received seven customer complaints filed with the NASD/FINRA, including complaints for churning and unsuitability. As a result of customer complaints, in January 2006, the Michigan Securities Division required that Chironis be placed on heightened supervision, and in March 2006 the Vermont Securities Division prohibited Chironis from soliciting investors in Vermont. Chironis was associated with Capital Growth from November 2005 until February 2008, when Capital Growth ceased business operations. Since March 2009, Chironis has been associated with another registered broker-dealer located in New York, New York.”