Somers brokerage firm rebuked for high commissions

A small Somers investment firm has been sanctioned for charging excessive commissions on securities transactions.

The Windmill Group Inc. consented to censure and a fine imposed on Dec. 5 by the Financial Industry Regulatory Authority.

Windmill, based in the Doherty Building on Route 202 in Somers, was founded in 1970 and is owned by John A. Maceranka, president, and Gregory R. Capozzi, vice president.

It manages $40.3 million in assets for 205 clients.

FINRA, a self-regulatory organization that oversees broker-dealers and financial professionals, spotted problems during an examination in 2021.

From June 2020 through April 2021, the regulator found, Windmill charged two related customers excessive commissions on 49 transactions.

FINRA’s “5% policy” is a general guideline for determining whether a sales commission is fair and reasonable. A fee greater than 5% can be deemed fair, depending on factors such as the type of security, the availability of the security and whether the commission was disclosed before the trade was made.

One of the firm’s owners, who is not identified in the findings, charged commissions ranging from 5.12% to 27.23% on 49 trades.

FINRA concluded that the commissions were excessive not only because they exceeded 5%, but because the trades involved highly liquid stocks and the customers were not made aware of the commissions until after the trades were made.

The excessive commissions totaled $8,375.

The regulator also found that one of Windmill’s owners exercised discretionary trading authority over the brokerage accounts, at the clients’ request, without first obtaining written authorization, in violation of the firm’s own procedures and a FINRA rule.

Windmill consented to a censure, a $12,500 fine and $8,375 restitution to the clients.

Maceranka signed the agreement on Nov. 27 and FINRA attorney Alyssa Braver endorsed it on Dec. 5.