Maxim Group Lawsuits: SEC AML Settlement and FINRA Fines

Maxim Group LLC, the New York broker-dealer and investment bank, has been the target of multiple regulatory enforcement actions and customer arbitration claims, including an $800,000 Securities and Exchange Commission settlement in 2023, a parallel $500,000 FINRA fine, and a string of smaller exchange-level penalties and investor complaints. Its FINRA BrokerCheck profile shows 37 disclosure events. Customers who believe they lost money because of the firm’s brokers can generally pursue their claims through FINRA arbitration.

The $800,000 SEC Settlement Over AML Failures

The largest action on Maxim’s record came in September 2023, when the SEC censured the firm, ordered it to cease and desist, and imposed an $800,000 civil penalty. The agency found that from January 2018 through January 2019, Maxim failed to design or implement adequate anti-money laundering policies for the high-volume microcap trading flowing through the firm, and failed to file Suspicious Activity Reports when required.¹

The numbers in the order are striking. On at least 90 occasions, a customer deposited microcap shares, sold them for $100,000 or more, and wired the proceeds out within 30 days — a classic pump-and-dump pattern — without triggering a SAR. Maxim’s daily “HiVol” exception report generated at least 3,000 entries during the period, but the firm rarely investigated them. In 390 cases where one customer’s sales made up at least 20 percent of a security’s daily volume, none produced a SAR. Of 80 accounts Maxim closed for AML reasons, only one did.¹

The same proceeding cited at least 10,000 short sales executed as principal without first locating shares to borrow, in violation of Regulation SHO Rule 203(b)(1). Maxim facilitated customer “not held” long sale orders in low-priced securities by shorting throughout the day and then covering by buying from the customer.²

Maxim settled without admitting or denying the findings. The SEC noted the firm had since hired additional AML staff, revised policies, added automated surveillance for low-priced securities, and retained an outside consultant to review Regulation SHO procedures. The context matters: low-priced securities trading generated more than $7 million in commissions in 2018, or 14.1 percent of Maxim’s total commission revenue that year.¹

Parallel $500,000 FINRA Fine

Around the same time, FINRA separately fined Maxim $500,000 for related AML deficiencies. According to Compliance Week, FINRA alleged the firm’s program had weaknesses that impeded detection of red flags and that Maxim lacked procedures to ensure securities sales complied with Section 5 of the Securities Act, which governs the registration of offerings. FINRA also credited the firm’s remedial steps.³

Exchange-Level Disciplinary Actions

2019: $450,000 NYSE Arca Fine for Market Access Failures

In April 2019, NYSE Arca fined Maxim $450,000 and censured the firm for violating the SEC’s Market Access Rule (Rule 15c3-5) between December 2016 and December 2018. The exchange found the firm had no post-trade surveillance for spoofing or layering, used “soft limits” rather than hard blocks for erroneous orders, and could not produce records or training documentation showing when those limits could be overridden. FINRA had already sent two cautionary letters in 2013 for similar pre-trade control failures.⁴

2025: $145,000 Fine for Options Order Recordkeeping

In August 2025, NYSE Arca fined Maxim $145,000 and censured the firm for failures involving manually handled options orders. Starting in at least January 2023, the firm failed to maintain accurate order memoranda for roughly 900 orders, including records of when orders were transmitted to execution venues. A trader had also misunderstood “announced” to mean an order had been sent to the floor rather than formally exposed to the trading crowd, causing the firm to tell counterparties orders were announced when they were not. Maxim terminated its NYSE Arca registration on May 9, 2025, before the settlement was finalized, and paid the fine on August 14, 2025.⁵

2024 FINRA Fine for Order Routing Reports

In October 2024, FINRA fined Maxim $75,000 for publishing incomplete or inaccurate quarterly reports on how it routed customer orders, as required by Rule 606(a) of Regulation NMS. Between the fourth quarter of 2019 and the first quarter of 2021, the firm’s public disclosures failed to reveal rebates received from certain equities execution venues and, in some quarters, omitted required detail on per-share payments and transaction fees. In one instance the firm listed venues it did not actually use. FINRA had flagged these problems during a 2020 cycle exam, and Maxim did not fix them promptly.⁶

Unit Investment Trust Supervision Case

In October 2018, FINRA censured and fined Maxim $65,000 for failing to supervise brokers who churned unit investment trusts from January 2012 through January 2017. The firm had no exception reports or surveillance tools to catch a pattern in which brokers repeatedly told customers to sell UITs well before their 24-month maturity dates and roll the proceeds into new UITs with identical objectives. Customers held these products an average of 310 days, and the frequent trading produced $167,780 in excess sales charges.⁷

Two Maxim brokers were sanctioned individually:

Eric Howard Kunis was fined $2,500, suspended for two months, and ordered to pay $2,189 in restitution for unsuitable short-term UIT trading in 11 customer accounts.⁸
Mark Jude Ketner was fined $5,000, suspended for two months, and ordered to pay roughly $1,054 in restitution. Ketner had recommended UIT sales an average of 195 days after purchase. In a separate customer arbitration (FINRA Case No. 15-03492) alleging unauthorized trading, churning, and unsuitability, a panel awarded the customer $199,788 in compensatory damages plus expert witness fees, finding Ketner jointly and severally liable.⁹

Customer Arbitration Claims Against Maxim Brokers

Beyond regulator-driven cases, Maxim and its brokers have been named in numerous customer arbitrations alleging unsuitable recommendations, unauthorized trading, churning, misrepresentation, and failure to supervise.¹⁰

Christopher Thomas Brothers, formerly of Maxim’s Fort Lauderdale office, has drawn multiple recent claims:

In July 2024, a customer and their LLC filed a $1 million claim alleging misrepresentations and breaches of fiduciary duty. Maxim settled for $80,000. Brothers denied the allegations and said the firm settled to avoid litigation costs.¹¹
A June 2024 claim alleged unsuitable private placement recommendations, breach of fiduciary duty, and misrepresentation, seeking $300,000.¹⁰
A January 2024 claim alleging unsuitable products, overconcentration in high-risk investments, and misrepresentation settled in February 2025 for $20,000.¹²
In January 2026, a FINRA arbitration filed by six customers alleging unsuitable recommendations and misrepresentation in a private placement settled for $55,000.¹³

Separately, broker Murry Meir Shapero was suspended by FINRA after consenting to findings that he engaged in unauthorized trading in 75 customer accounts.¹⁰

What Investors Can Do

Maxim was founded in 2002 and is registered with the SEC, FINRA, NYSE American, Nasdaq, and the New York Stock Exchange. Its BrokerCheck profile currently lists 37 disclosure events, made up of 36 regulatory events and one arbitration.⁶

If you believe you have suffered losses because of a Maxim broker, the usual path is FINRA arbitration. Most brokerage account agreements contain mandatory arbitration clauses, so disputes generally cannot be brought in court. Claims must ordinarily be filed within six years of the events giving rise to the dispute.¹⁴ Before filing, it’s worth pulling the broker’s own BrokerCheck record, since prior disclosures often bear on the strength of a claim.

1
SEC. In the Matter of Maxim Group, LLC, Release No. 34-98605
2
SEC. In the Matter of Maxim Group, LLC – Administrative Proceedings
3
Compliance Week. Maxim Group Fined $800K by SEC Over SARs Filing Lapses
4
NYSE. Maxim Group LLC, Proceeding No. 2016-12-00089
5
NYSE. Maxim Group LLC, AWC No. 2023-12-18-00001
6
FINRA. Maxim Group LLC BrokerCheck Report
7
Securities Arbitrations. Maxim Group UIT Sales
8
FINRA. FINRA Disciplinary Actions, December 2018
9
FINRA. Mark Jude Ketner BrokerCheck Report
10
Securities Arbitrations. Maxim Group LLC
11
FINRA. Christopher Thomas Brothers BrokerCheck Summary
12
Securities Lawyer. Christopher Brothers, Fort Lauderdale, Florida
13
Rex Securities Law. Chris Brothers Maxim Group
14
SEC. Broker-Dealer/Customer Arbitration Investor Bulletin