Dad’s Ponzi Scheme Costs Son’s Former B-D $2.7 Million in FINRA Arbitration

Why It Matters

The case highlights how inadequate supervision can expose broker‑dealers to large arbitration awards, even when fraud originates outside the firm, underscoring the need for stricter compliance oversight in the securities industry.

Key Takeaways

• Arkadios ordered to pay $2.7 million after FINRA arbitration
• Father’s Ponzi scheme defrauded 93 investors of $9.5 million
• Firm cited for inadequate supervision of advisor’s father
• Advisor Michael Lickiss faces seven pending investor complaints
• Arkadios plans to appeal the award in federal court

Pulse Analysis

7 million to investor Candyce Myers, who was never a client of the firm. The award stemmed from allegations that Arkadios failed to supervise Michael Lickiss, a former advisor, whose father, Edwin Lickiss, operated a decades‑long Ponzi scheme from a shared office space. The panel found breaches of fiduciary duty, negligence and “selling away” claims, highlighting how a broker‑dealer’s lack of oversight can expose it to costly liability even when the fraudulent activity originates outside its formal employment structure.

5 million from 93 investors between 1998 and 2024. He promised “tax‑free” bonds with returns exceeding 20 percent, then used new capital to pay earlier victims—a classic Ponzi model. The case underscores the persistent threat of individual fraudsters exploiting the credibility of registered advisers and the importance of rigorous background checks, especially when family members share office resources. Regulators are increasingly scrutinizing “old‑school” practices such as unauthorized use of Medallion Guarantee stamps.

Arkadios Capital has announced plans to file a motion to vacate the arbitration award in federal court, arguing that the evidence does not support liability and that the father was never an employee. The firm’s response reflects a broader industry trend of contesting supervisory findings that can jeopardize reputation and capital. For broker‑dealers, the episode serves as a cautionary tale: robust supervision, clear segregation of personal and firm activities, and proactive monitoring of advisors’ relationships are essential to mitigate exposure to similar claims and preserve investor trust.