FINRA Sanctions Arkadios Capital Over Supervisory Failures Related to Reg BI

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Arkadios Capital, LLC has agreed to pay a $25,000 fine to settle allegations brought by the Financial Industry Regulatory Authority (FINRA) concerning violations of Regulation Best Interest (Reg BI).

According to FINRA, between September 2022 and March 2024, Arkadios Capital failed to establish, maintain, and enforce a supervisory system — including written policies and procedures — that was reasonably designed to ensure compliance with the Care Obligation under Rule 15l-1 of the Securities Exchange Act of 1934. The deficiencies were related to the firm's recommendations of leveraged and inverse exchange-traded funds, commonly referred to as non-traditional ETFs.

FINRA stated that, as a result of these supervisory shortcomings, the firm did not meet Reg BI's Compliance Obligation. The conduct constituted violations of Exchange Act Rule 15l-1(a)(1), as well as FINRA Rules 3110, which governs supervision, and 2010, which requires high standards of commercial honor.

Under the settlement, Arkadios Capital was censured and ordered to pay restitution totaling $20,571.29, 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.