An Atlanta-based broker-dealer was ordered to pay $2.7 million in compensatory damages to an investor who suffered losses from having been defrauded, according to Financial Advisor.
A Financial Industry Regulatory Authority arbitration panel issued the award in favor of Candyce Myers, who was never a customer of the firm, Arkadios Capital, but was the victim of a Ponzi scheme orchestrated by the father of an Arkadios representative. The award was based on the firm’s relationship with the son, Michael Lickiss.
The father, 78-year-old Edwin Emmett Lickiss Jr. pleaded guilty to wire fraud and money laundering in connection with a scheme that ran from 1998 to 2024 in which he defrauded more than 93 investors of at least $9.5 million.
Michael Lickiss worked at Arkadios from the end of 2021 to the summer of 2024. Both Edwin and Michael Lickiss also worked for Foundation Financial Group, from which Edwin Lickiss was accused of issuing fraudulent promissory notes. Prosecutors said Edwin Lickiss “issued fraudulent promissory notes on the letterhead of his former firm, Foundation Financial Group. In fact, Lickiss used subsequent victim funds to make payments to those who had invested earlier, consistent with a Ponzi scheme.”
Candyce Myers alleged that Arkadios failed to supervise Michael Lickiss during his time at the firm.
In the statement of claim, Myers accused Arkadios of breach of regulatory requirements; breach of fiduciary duty and aiding and abetting breach of fiduciary duty; negligence; failure to supervise; and selling away. She had sought compensatory damages in the amount of $2.7 million, punitive damages in the amount of $500,000, and interest and other costs associated with the case.
In addition to awarding the full amount of compensatory damages requested, the panel of three public FINRA arbitrators also held Arkadios liable for paying her interest on the amount at the California statutory rate from the award date until its paid in full.
Michael Lickiss has repeatedly said in a number of customer disputes disclosed on his BrokerCheck page that he had no knowledge of his father’s scheme.
Though Michael Lickiss was personally named by Myers in the complaint against Arkadios, FINRA said the arbitration claims against him were “indefinitely stayed” after he filed for bankruptcy.
The arbitrators’ decision drew praise from Myers’ attorneys at Silver Law Group in Coral Springs, Fla.
“If the panel believed that the son and the firm knew nothing about this, it probably would’ve been a different conclusion,” attorney Scott L. Silver told Financial Advisor. “We are happy for our client. After four days of hearing testimony and presentation of evidence, the panel reached the correct conclusion that Arkadios aided in this fraud and failed to supervise the office.”
The lead attorney on the case for the Silver Law Group, Ryan A. Schwamm, said Edwin Lickiss sold or transferred Foundation Financial Group to his son after the father was suspended by FINRA, and his son continued to operate it as a registered broker and allowed his father to continue working from the same office.
“Our allegation,” added Scott Silver, “was that the son was aware of what the father was doing and coupled with the physical or hard evidence in the case, while it’s not explained in the award, it seems that the panel came to the same conclusion. It was a two-person office, a few hundred square feet. They operated on top of each other; the son’s testimony was simply not credible.”
Arkadios’ top lawyer called the arbitration decision “simply inexplicable” and said the firm plans to ask a federal court to overturn the award,
T.C. Spence Pryor, chief legal and corporate strategy officer at Arkadios, said the case should not have been arbitrated because of a lack of evidence. “This is a flawed process that is completely stacked against the financial firms in favor of claimants,” Pryor said. “Having three public arbitrators without an industry arbitrator on this panel highlights the flaws in the FINRA arbitration process and in this case resulted in a wholly unjust result against Arkadios.”
“If Michael had any knowledge or was a participant in the Ponzi scheme, he would have been charged along with his father in the federal criminal case. No one else was charged in “connection with Edwin Lickiss’s scheme,” Pryor said.
“The conclusion that Arkadios had any role in, or in any way caused or contributed to claimant’s investment in Edwin’s fraud, is simply inexplicable. Because the conclusions in this case rejected the evidence … Arkadios intends to challenge this miscarriage of justice by filing a motion to vacate the award in federal court,” Pryor said.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
