The SEC charged New York-based brokerage firm Linkbrokers Derivatives LLC with unlawfully taking secret profits of more than $18M from customers by adding hidden markups and markdowns to their trades. According to the SEC, Linkbrokers defrauded customers by purporting to charge them very low commission fees, but in reality extracting fees that in some cases were more than 1,000 percent greater than represented. The scheme was difficult for customers to detect because the brokers charged the markups and markdowns during times of market volatility in order to conceal the false prices they were reporting to customers. Linkbrokers agreed to pay $14M to settle the SEC’s charges. SEC
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