SEC Says Broker Must Pay $350,000 To Nuns

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January 10, 2011; Source: Irish Central | A broker who had been accused of helping himself to outsize fees from trading bonds and securities in accounts held by the Sisters of Charity, a group of elderly nuns in the Bronx, N.Y., will pay back $350,000 under a settlement reached with Securities Exchange Commission.

Following an investigation that began last April, the SEC ruled that Paul George Chironis had been involved in "abusive trading patterns" to reap unjustified fees, a practice known as "churning." Although Chironis refused to admit or deny any guilt, Irish Central reports that the SEC found that the broker "engaged in excessive trading to inflate commissions and other revenues ignoring customers’ instructions and objectives."

Chironis oversaw two Sisters of Charity's accounts. One paid for care of nuns in assisted-living facilities and the other supported the group's charitable work. George Canellos of the SEC's New York Regional office said Sisters of Charity paid transaction fees of over 10 percent to Chironis, which “virtually guaranteed the convent's accounts would lose money." Canellos also said that Chironis' actions showed that he was "focused on generating substantial commissions for himself," pocketing some 10.8 percent of the value of the Sisters of Charity's holdings from transaction fees.—Bruce Trachtenberg