A California securities firm that recently came under scrutiny from investigators probing allegations of suspicious money transfers from Russia has operated for two years with no customers, according to the company's accountant.
This week, auditors from the National Association of Securities Dealers (NASD) asked the company, Sinex Securities LLC, for documentation that explains why it is in business with no clients.
Sinex Securities is among three additional financial services companies--along with a host of other firms in New York--that authorities are examining for clues about the movement of more than $7 billion through a series of accounts at the Bank of New York over the past three years.
Sinex Securities, Sinex Corp. and Sinex Bank all shared the same address in San Francisco, documents show. And they all have associations with a Russian businessman under federal indictment for allegedly operating an illegal money transmitting business that moved money out of Russia, through the Bank of New York and into other financial institutions around the world.
While Sinex Securities was registered with the NASD and California officials to do business more than two years ago, the company never consummated a deal or made any money, according to Debasish Banerjee, an accountant listed as a company principal.
Banerjee defended the company's reputation, saying "this is the cleanest thing." He said the company had hoped to sell Russia's high-flying GKO bonds to top banks and other institutional investors in the United States. Those hopes foundered after the GKO market collapsed last year, Banerjee said.
"Sinex Securities has no customer accounts," he said. "Zero accounts. Zero customers."
But several days ago NASD officials, working on a special investigative and routine audit, asked the company for paperwork explaining its circumstances, Banerjee said. "They asked the same questions," he said. NASD officials declined to comment.
Federal and New York state investigators officials want to know about all three Sinex companies. The investigators believe an important figure in the federal Bank of New York probe, Aleksey Volkov, was a director of Sinex Bank, a little-known operation that was licensed on the Pacific island of Nauru. Volkov, through his attorney, has denied any wrongdoing.
Sinex Securities and Sinex Bank shared an owner, a Russian named Maxim Barski, according to documents filed with the California division of securities regulations. Barski could not be reached for comment; Banerjee said Barski is in Moscow and declined to give his telephone number.
While Sinex Securities did have money moving through its bank account--up to $1 million or more over the two years--Banerjee said the money was Barski's and was used as capital for the company.
Sinex Securities was registered with the NASD in March 1997. A short time later, it was registered to do business in California. Two weeks ago the company received approval from New Jersey to conduct business there, according to the state's securities bureau.
Another principal in the company is Maxim V. Sidorin, according to California officials. A shareholder in the company is Olmax Global Funds, according to California officials. Banerjee said Olmax was a hedge fund but he didn't know the owners.