A broker at a small boutique brokerage has been barred from practice by FINRA after an investigation revealed he transferred over $1 million from client accounts to his own personal accounts.
According to FINRA records, Eric William Johnson was a broker for RedRidge Securities, a Chicago-based boutique brokerage serving high net worth clients and their families.
Beginning in December 2006 until this past September, Johnson misappropriated over $1 million from client accounts at the brokerage, the regulator noted in its settlement. Johnson made at least 60 wire transfers from their accounts into his own, faking the signatures of the firms principal and notary public, FINRA noted.
Johnson was fired by the brokerage on September 24. According to FINRA broker check records, the transfers were discovered that day by the firms internal compliance system, and immediately reported to federal authorities.
Johnson had been a licensed broker for 21 years, and had no previous client complaints lodged against him in his FINRA broker record.
Calls left at Johnsons home were not returned. His attorney in the FINRA proceedings, Chicago-based Peter G. Baroni, did not return calls for comment.
In a statement, Brent Hurt, president and managing principal of RedRidge Securities, acknowledged that Johnson had been dismissed, and said it was an isolated incident.
Sadly, the termination was for cause as we have reason to believe he violated several securities regulations. The violations, though serious, were isolated to five accounts out of the hundreds we manage, Hurt stated.
We are currently completing a review of every client account and remain confident that this is an isolated incident.