FINRA barred a Registered Principal in Lighthouse Point, FL, on charges he effected fictitious and prearranged trades involving CMO's in firm’s proprietary trading account, so as to conceal inventory positions and create the false appearance of profitability.  And yes, he worked in a Boca Raton broker-dealer.  

In some cases, no contra-party had agreed to the transaction at the time Principal submitted an order;  in other cases, Principal agreed to repurchase the security from the contra-party at an agreed-upon price that guaranteed a profit to the contra-party - this effectively caused the beneficial ownership to remain with Green.

The Principal allegedly devised a strategy that not only hedged and concealed the positions, but circumvented trading capital and inventory limits set by his firm - as well as created the impression of profitable trading. He did so by extending the settlement dates for certain bonds and coordinating fictitious transactions with other broker-dealers. Through this scheme the Principal generated over $7.3 million in compensation - based upon the apparent profits. Ultimately, the overstatement of the firm’s net capital caused firm to cease doing business.

Principal Green capped things off by not showing up for on-the-record testimony.   

This is FINRA Case #2008012444201.   [Disc. Actions for February]