Arkadios Capital, LLC has agreed to pay a $25,000 fine to settle allegations from the Financial Industry Regulatory Authority (FINRA) linked to supervisory shortcomings tied to Regulation Best Interest (Reg BI).
According to FINRA, the issues relate to the period between September 2022 and March 2024, when the firm allegedly failed to establish, maintain, and enforce a supervisory system, including written policies and procedures, that was reasonably designed to ensure compliance with Reg BI’s Care Obligation.
FINRA said the deficiencies were connected to Arkadios’ recommendations involving leveraged and inverse exchange-traded funds, commonly described as non-traditional ETFs. As a result of the supervisory gaps, FINRA concluded the firm did not meet Reg BI’s Compliance Obligation.
FINRA stated the conduct involved violations of Exchange Act Rule 15l-1(a)(1), as well as FINRA Rule 3110 (supervision) and FINRA Rule 2010 (standards of commercial honor and principles of trade).
Under the settlement, Arkadios Capital was censured and ordered to pay $20,571.29 in restitution, plus interest, in addition to the monetary fine.
Arkadios Capital has been a FINRA member since 2016. The firm is headquartered in Atlanta, Georgia, and operates with 268 registered representatives across 82 branch offices, according to the regulator.
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