The Financial Industry Regulatory Authority announced today that it has expelled Dallas-based brokerage firm Barron Moore, Inc., and taken disciplinary action against seven individuals for illegal sales of unregistered penny stocks.

Those sanctions range from fines and suspensions to permanent bars from the securities industry. The individuals include five registered representatives formerly associated with three different firms – Barron Moore, Midas Securities LLC of Anaheim, Ca. and Milestone Group Management, which is no longer in business — and supervisors from Barron Moore and Milestone. One registered representative was barred for failing to provide documents and testimony in FINRA’s investigation.

FINRA found that four of the registered reps sold large quantities of unregistered stock into the public markets on behalf of customers, in violation of federal securities laws. Also, neither the representatives, nor the supervisors, took appropriate steps to determine whether the securities could be sold without violating the registration requirements of the federal securities laws, FINRA said. The regulator found that this conduct occurred despite the presence of numerous red flags indicating that illegal stock distributions might be taking place.

It also noted that, in settling these matters, the sanctioned individuals neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

“Retail brokers are the first line of defense for the markets,” said Susan Merrill, executive vice president and chief of enforcement. “Brokerage firms and their employees must take action to ensure that they are not participating in illegal sales of unregistered securities. In this case, the respondents failed to take appropriate action and illegally sold millions of shares of unregistered securities into the public marketplace.”