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ConvergEx to pay $150M in civil, criminal penalties to settle charges over unwarranted fees

ConvergEx Group will pay $150 million to settle civil and criminal charges that it charged clients millions of dollars in unwarranted fees and hid the practice from investors.

The New York-based brokerage will pay $107 million to settle charges with the Securities and Exchange Commission and $43.8 million in criminal penalties and restitution to resolve a complaint by the Justice Department.

The firm was charged with one count of conspiracy to commit securities fraud and one count of wire fraud.

Two former ConvergEx employees also pleaded guilty Wednesday in federal court in Newark, N.J., to conspiracy to commit securities and wire fraud.

Jonathan Daspin faces up to 30 years in prison and Thomas Lekargeren five years.

Authorities say the company routed trades through its Bermuda office and charged overseas fees that were concealed from clients.

ConvergEx says it has taken steps to prevent any further such misconduct.

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