FINRA expelled TX-based APS Financial Corporation, and barred the firm's former President and a former broker for working in concert to overcharge an elderly investor by $1.2 million.  Here's what went wrong: Former RR Peter Aman agreed to be barred from the industry, to settle FINRA charges that he added mark-ups on 45 executed customer orders that ranged from 4.15% - 67% (43 of these orders hit accounts of that single elderly investor). Former President George Conwill agreed to be barred from the industry, to settle FINRA charges he charged excessive mark-ups on customer transactions, he supervision was deficient, and he committed rule violations re: trading in corporate "junk" bonds, CMO's and CDO's. APS Financial agreed to be expelled from the industry, to settle FINRA charges it charged excessive mark-ups, had deficient supervision and committed rule violations while trading in corporate "junk" bonds, CMO's and CDO's. In total, APS Financial overcharged customers $1,250,000 on 59 transactions - Conwill approved all 53 mark-ups above 5%, including the 42 of 43 excessive mark-ups for the elderly investor's accounts. From APS Financial's AWC:

1.  During the review period  [1/1-12/31 2005;  10/1-12/31 2006], in 59 transactions, of which 21 were in corporate bonds, 34 were in [CMO's] and 4 were in [CDO's], APSS, through its [RR's], sold (bought) securities to (from) customers and failed to sell (buy) such securities at a price that was fair, taking into consideration all relevant circumstances, including market conditions with respect to each security at the time of the transaction, the expense involved and that the firm was entitled to a profit. The excessive markups and markdowns totaled $1,272,456.28 for the  59 transactions. In six of the transactions, the markups and markdowns exceeded 100%.  Forty-three of the transactions were for the accounts of a high net worth senior customer of the firm. The firm, acting through its [RR's], failed to disclose the markups and markdowns to its customers. The transactions are identified on Exhibit 1 which is attached. The conduct described in this paragraph constitutes separate and distinct violations of NASD Rules 2110, 2440 and IM-2440. 2. During the review period, APSS failed to establish and maintain an adequate supervisory system and otherwise failed to reasonably and properly supervise the firm and its registered representatives s6 as to detect and prevent violations of NASD Rules 2110, 2440 and IM-2440. The conduct described in this paragraph constitutes a violation of NASD Rules 2110 and 3010. [FINRA News Rel., 12/29]

The complete "Letters of Acceptance, Waiver and Consent" are available below: Click on ... APF FInancial's AWC. Click on ... George Conwill AWC. Click on ... Peter Aman's AWC.