The New Jersey Bureau of Securities has revoked the registration of a broker-dealer whose agents generated more than $28.7 million through excessive, unsuitable and unauthorized trading at the cost of its clients, according to news reports.

Red Bank, N.J.-based First Standard Financial Co. allegedly hired agents with a history of disclosure events including regulatory actions and customer complaints over this type of trading, according to documents issued by the bureau and filed in New Jersey Superior Court in Essex County, writes. The agents then allegedly engaged in unsuitable trading, such as short-term trading in bonds, while First Standard was complicit in their conduct, according to court documents cited by the radio station’s website.

As of the end of last year, 44 First Standard agents were registered with the bureau but the firm then suffered an exodus of agents and principals, writes. Many clients, however, maintained their accounts with the firm, allegedly attracting unscrupulous brokers to tap into dozens of accounts and churn them for commissions, trading “clients’ accounts like sharks in a feeding frenzy,” says Christopher Gerold, the bureau’s chief, according to the website.

In addition to revoking First Standard’s registration, the bureau obtained a court order to freeze the firm’s assets as well as temporarily restrain it from destroying records and to hand over a list of its assets and liabilities, writes. The regulator has also asked the court to levy civil monetary penalties against the firm and to order it to pay restitution, according to the website.

In May, the bureau revoked former First Standard agent Gabriel Block’s registration and ordered him to pay $750,000 in civil penalties over allegedly unsuitable trading that earned him and his broker-dealers at least $1.6 million. And last month, the bureau revoked the registration of First Standard’s last producing agent, Philip Sparacino, and ordered him to pay $750,000 in civil penalties over excessive and unsuitable trading that generated at least $1.4 million for him and First Standard, writes.


And the regulator intends to continue its pursuit of anyone associated with the scheme.

“Our investigation into excessive, unsuitable and unauthorized trading at First Standard isn’t over,” says Paul Rodríguez, acting director of the division of consumer affairs at the bureau, according to the website. “We fully intend to hold accountable everyone who contributed to their egregious abuse of the trust investors placed in them.”