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Maximum Financial Investment Group Inc. Expelled by FINRA

By Oguz Ozdemir

An investment company and its CEO have been cited by the Financial Industry Regulatory Authority (FINRA) for repeatedly violating registration and rules that had to do with their foray into forex trading.

On August 21, 2009, FINRA expelled the Maximum Financial Investment Group, Inc. as well as permanently barred the company's Chief Executive Officer and surprisingly, Chief Compliance Officer, Christopher t. Paganes from ever being a principal in a securities firm again. Paganes is also not allowed to associate with a securities firm for a period of nine months. The only reason that Paganes was not fined was because he showed proof that he was not able to pay a fine even if one was imposed.

The events that led up to such a serious end result did not come without fair warnings. forex trading is a recent addition to the investment scene and it is all over the internet. It basically entails the exchange of foreign currency – one country uses their currency to buy another country's currency in order to realize a profit based on the values at the time of the deal.

In September of 2007, Maximum began working with Boston Trading & Research, which was not registered, in the forex trading market. With deposits totaling more than $15 million over a five month period in 2008, Maximum did not record the funds and as a result did not have the minimum net capital that was required which is a violation of FINRA rules and federal securities laws.

Maximum did not keep a reserve bank account with the appropriate funds deposited in it based on the dealings of its forex customers. Another area of concern was that the company did not "establish systems and procedures" to make sure that the monies that were being traded were from money laundering.

Maximum did not notify FINRA when it changed its scope of business when it began forex trading. The company was supposed to submit an application to FINRA for approval to change the nature of their business. In addition, the company increased their number of representatives by 180%. Maximum had been warned on several occasions that any type of increase of this nature was supposed to have been submitted for approval 30 days prior to the increase.

Maximum did eventually file the application but it was seven months after being warned and even though they were aware of their violations, the company let these representatives keep working for another two months. Finally, FINRA cited Maximum for not filing the appropriate application required when it transferred its assets to a registered dealer.

Even though these charges were brought about, Maximum and Paganes would not admit nor deny the charges and accepted the citations. If you enter into the online forex trading you should make sure that you know who you are dealing with. If you think that you may have become victim to a financial loss due to the negligence of a financial investment firm, please give us a call at Napoli Bern Ripka, 1-888-LAW IN NY and we will be happy to provide you with a free consultation.

Originally posted at InjuryBoard by Oguz Ozdemir

Full post as published by New York City Personal Injury Lawyer on September 01, 2009 (boomark / email).