The Sonn Law Group is investigating claims related to broker Erick J. Arnett (FINRA CRD#: 5007131) formerly of Dalton Strategic, who is currently under investigation for engaging in outside business activity.
According to the FINRA complaint, Erick J. Arnett engaged in outside business activity while working for Dalton Strategic. Arnett was operating a marketing consulting firm from January 2010 through January 2013 and did not properly disclose the information to his broker-dealer, Dalton Strategic. This is a violation of NASD Rule 3030 and FINRA Rules 3270 and 2010. Additionally, Arnett filed for personal bankruptcy in January of 2011 and failed to amend his Form U4 to disclose the bankruptcy. This is a violation of Article V, Section 2(c) of the FINRA By-Lays and FINRA Rules 1122 and 2010.
During the period in question, Arnett engaged in outside business activity because he operated a marketing consulting firm called “Rnett Consulting.” He received compensation for this business activity. Arnett received 35 checks totaling more than $60,000 from MD, a fellow Dalton Strategic representative. Many of the checks included “CAS” in the memo line. CAS refers to an entity that provided separately-managed futures and commodities trading. The entity was run by CS, a former associate of Arnett and MD – he was previously registered with Dalton Strategic. The investments in CAS were not offered or approved by Dalton Strategic.
In all, MD referred approximately 28 people to CAS. Together, they invested more than $2 million. Some of the people referred to CAS lost a substantial portion of their investments. Arnett knew that MD was referring clients to CAS, and had a duty to provide written disclosure to Dalton regarding the activity.
Regarding his personal bankruptcy, Arnett willfully delayed disclosure. Though it was only six days old, he responded “no” to the question “Did you have any occurrences of any events that would require you to file a DRP” on his 2010 compliance questionnaire. He also filed five inaccurate amendments to his Form U4.
These clear violations of FINRA rules can have an impact on investors.
Did you lose money after working with Erick J. Arnett, a former broker who was employed by Dalton Strategic? If you invested money through Erick Arnett and suffered a loss, you may be eligible to file a claim for compensation. Contact Sonn Law Group
Initiated By – FINRA
Allegations
Arnett was named a respondent in a FINRA complaint alleging that he engaged in an outside business activity by operating a “marketing consulting” firm for compensation without properly disclosing it to his member firm. The complaint alleges that Arnett provided marketing services to his business partner and fellow firm representative, and others in exchange for compensation through his outside business activity. Arnett received 35 checks totaling more than $60,000 from his business partner alone. The complaint also alleges that Arnett willfully failed to timely amend his Form U4 to disclose a personal bankruptcy.
When you work with a financial advisor like Erick J. Arnett at a FINRA firm, you should be able to expect that your investments will be handled properly. However, brokers often fail to meet their fiduciary duties to clients, and in some cases, brokers even commit securities fraud. If you’ve suffered losses, contact us today for a free case review.
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