Securities Lawyers Blog
The investment lawyers at Gana Weinstein LLP have experience helping investors determine whether their portfolio losses at investment firms, such as Ascendiant Capital Markets, LLC, were caused by broker misconduct. There are many different ways that your broker can impermissibly drain your accounts. Our attorneys can help you understand the cause of your investment losses, uncover misconduct, and apply the law to hold accountable those responsible.
Ascendiant Capital Markets is a broker-dealer that earns revenue from proprietary trading and from selling securities to customers on a fully disclosed basis through a clearing broker. Formed in Nevada in 2010, the firm is a wholly owned subsidiary of Ascendiant Capital Partners and lists its principal office in Jupiter, Florida.
Ascendiant Capital Markets, LLC – By the Numbers:
- CRD #: 152912
- Regulatory Events: 10
- Broker Employees: 18
Ascendiant Capital Markets, LLC – In the News:
FINRA v. Ascendiant Capital Markets, LLC (Case #2015045508801) – On May 7, 2015, Ascendiant’s market making desk effected 45 short sales in an equity security, Riviera Tool Co. (RIVT), for its own account, without complying with the locate requirement of Rule 203(b)(1) of Regulation SHO of the Securities Exchange Act of 1934 (Regulation SHO). In each of these 45 instances, the firm erroneously relied upon the bona-fide market making exemption to Rule 203(b)(1) of Regulation SHO, effecting each short sale without (1) borrowing the security, or entering into a bona-fide arrangement to borrow the security; or (2) having reasonable grounds to believe that the security could be borrowed so that it could be delivered on the date delivery was due; and (3) documenting compliance with Rule 203(b)(1) of Regulation SHO. This conduct violated Rule 203(b)(1) of Regulation SHO and FINRA Rule 2010, and generated $26,720 in net profits for the firm and its traders. Moreover, Ascendiant failed to follow in connection with these 45 transactions the process outlined in its written supervisory procedures (WSPs) for verifying the applicability of the bona-fide market making exception. Ascendiant thereby failed to enforce a system of supervision that was reasonably designed to comply with Regulation SHO in violation of FINRA Rules 3110(b) and 2010.
FINRA v. Ascendiant Capital Markets, LLC (Case #2014038989201) – Respondent ACM charged unfair and unreasonable prices with fraudulently excessive and undisclosed markups in principal basis stock sales made by ACM to its corporate customer NOA from April 30, 2012, to September 11, 2012. In these eleven stock sales from ACM proprietary accounts, ACM charged its customer excessive prices that included undisclosed markups that were substantially above the then-prevailing prices for the stocks sold to the customer and, in particular, were well above the long-established 5% markup guideline for principal basis stock sales. For the two largest stock sales, ACM charged markups of 105.9% and 123.9% over the then-prevailing prices for the stock shares. In all eleven sales at issue, ACM’s markups averaged 59%. This was 5.9 times higher than the 10% markup level above which markups on stocks long have been held to be presumptively fraudulent. If ACM had charged fair and reasonable prices for the stocks sold to its customer, with permissible markups of 5% over then-prevailing prices for the stocks, the markups for all eleven trades would have totaled about $13,000. By sharp contrast, the excessive and undisclosed markups that ACM charged to its customer on these principal basis trades totaled $153,000. Thus, ACM overcharged its customer $140,000 for these stock purchases. The over-the-counter stocks sold by ACM to its customer with unfair and unreasonable prices and excessive and undisclosed markups were shares of Digital Development Group Corp. (ticker symbol: DIDG), a “pre-exploration phase” mineral rights company with no revenues and no ongoing business operations, and Assured Pharmacy, Inc. (ticker symbol: APHY), a pharmacy company that specialized in supplying pain medication prescriptions and that had experienced many consecutive years of losses. ACM was a market maker for both DIDG and APHY in 2012. As a result, ACM was well aware of the prevailing prices of these stocks. Moreover, ACM knew that the prices it charged its customer for these stocks were excessive, unreasonable and unfair. ACM also knew that, for nine of the eleven sales, the prices ACM charged to its customer were not only excessive, but also fraudulent, with fraudulently excessive and undisclosed markups. By selling shares of DIDG and APHY at fraudulently excessive prices and with fraudulently excessive markups in nine separate sales, ACM willfully violated Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 and also violated FINRA Rules 2010 and 2020. The nine trades with fraudulently excessive prices and markups included ACM’s sales to NOA of (a) DIDG shares on May 21, 2012, and August 20, 2012, and (b) APHY shares on May 30, 2012, June 21, 2012, September 6, 2012, and September 11, 2012 (with two separate sales on September 6 and three sales on September 11).
Our attorneys have successfully represented hundreds of investors in investment disputes with their brokers and brokerage firms. Our consultations are free and we welcome all inquiries.