Erick J. Arnett, of Spring Hill, Florida, a stockbroker formerly registered with Dalton Strategic Investment Services Inc., has been fined $7,500.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in unapproved outside business activities. Department of Enforcement v. Erick J. Arnett, No. 2015044778302 (Sept. 29, 2017).
According to the AWC, between January of 2010 and January of 2013, Arnett managed a marketing consulting firm, Rnett Consulting, without ever notifying Dalton Strategic Investment Services, Inc. Particularly, Arnett and a stockbroker colleague, MD, as well as other stockbrokers associated with the firm, engaged in activities through Rnett Consulting.
The AWC stated that thirty-five checks totaling $60,000.00 had been provided by MD to Arnett from August of 2010 to January of 2013 for services Arnett provided, where twenty-two of the checks were written out to a separate commodities and futures based trading company, CAS, which was controlled by a former registered representative of Dalton Strategic Investment Services, Inc. A total of twenty-eight investors had evidently been referred by MD to CAS, in part due to Arnett’s marketing initiatives on MD’s behalf, wherein investors contributed at least $2,000,000.00 in assets away from the firm. Apparently, Dalton neither offered nor approved of the commodities and futures sold by CAS. The AWC revealed that investors sustained considerable losses.
The AWC stated that the written supervisory procedures implemented by the firm called for registered representatives such as Arnett to provide disclosure of outside business activities in writing prior to engaging in them. Apparently; Arnett never informed his firm about the nature of his outside business activities, which included the compensation he received from MD in return for Arnett’s marketing efforts. Consequently, FINRA found that Arnett’s conduct was violative of FINRA Rules 2010, 3270, and NASD Rule 3030.
FINRA Public Disclosure confirms that on August 31, 2010, a customer filed an investment related complaint involving Arnett’s conduct, in which the customer requested $13,862.66 in damages founded on accusations that Arnett made unsuitable investment recommendations to the customer and made misrepresentations to the customer concerning options products.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
