SEC Shuts Down Broker From Orange

Cox Securities Inc., the top-producing floor broker on the Pacific Exchange in 1997, was shut down by the Securities and Exchange Commission on Monday as part of a settlement of regulatory fraud charges.

The SEC alleged that the Los Angeles-based firm, owned by Edward R. Cox of Orange, created more than 1,000 false trades in which the firm shifted $1.5 million in trading losses to 53 other broker-dealers and floor specialists.

These false trades involved at least 31 securities from November 1996 to March 1998, the SEC said.

Cox Securities, which Cox began in 1991, agreed to a revocation of its SEC broker-dealer registration, according to the terms of the settlement.

Cox, 51, also agreed to be barred permanently from working as a broker-dealer.

“This resolves the matter with the SEC and Cox can move on,” said Cox’s attorney, Matthew Geragos of Los Angeles. Under the settlement, Cox neither admitted nor denied wrongdoing.

Cox Securities had been suspended from working on the Pacific Exchange since early 1999.

The SEC said it didn’t impose a fine on Edward Cox because of his inability to pay. “This case has wiped him out,” Geragos said. “He has virtually no assets.”

Cox is trying to get started in the commercial real estate sector, Geragos said. Cox had worked as a Pacific Exchange floor broker for various firms since August 1977.

Geragos said Cox Securities specialized in institutional trades for many large brokerages, including the Goldman Sachs Group Inc. and Salomon Smith Barney, which is now owned by Citigroup Inc.

Cox, who was the only broker in his firm, averaged 2,300 trades and 10 million shares a month in 1997, the SEC said.