Boca firm expelled from brokerage business for numerous violations

Sun Sentinel

A Boca Raton firm was banned from selling securities after the Financial Industry Regulation Authority found it had engaged in unauthorized trading, kept inaccurate books and even participated in a "fraudulent scheme," according to FINRA records.

In a rare move, FINRA expelled a company named, from belonging to the private regulatory agency after an investigation found numerous violations from the agency's rules that are not federal laws.

Fourteen security companies were expelled last year and 13 so far this year, said FINRA spokeswoman Michelle Ong.

The ouster is the equivalent of an attorney being disbarred from a bar association, she added. FINRA is the nation's largest regulatory agency that oversee brokerages and brokers. Its expelling of prevents the company from selling stock and other securities, she said. 

The company's CEO, Eric D. Arlt, was not available for comment Thursday, said a woman who answered his phone and identified herself as his wife. Mail to the Florida address of the company has been returned and a telephone number disconnected.

Last year, Jesse White, the Illinois Secretary of State, signed an order permanently banning the company from selling securities in the state. An Illinois man had accused of selling stock despite his orders to keep it. Later, suspended the agreed upon settlement payments, prompting the Illinois ban.

After its own investigation, FINRA recently found that had broken many basic rules of the regulatory agency, such as failing to report customers' complaints.

"The firm's registered representatives cold-called potential customers from a boiler room, opened accounts for people who never agreed to be firm customers and made unauthorized trades for those purported customers,'' according to a FINRA statement.

FINRA also found that "the firm's brokers predicted substantial increases in stock prices, often to specific levels, and the firm issued false trade confirmations and made other efforts to induce potential customers to pay for unauthorized transactions in furtherance of its fraudulent scheme."

And the company "purchased securities on margin with the customers' authorization.", 954-356-4205. Follow me on Twitter @donnagehrke

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