The U.S. Securities and Exchange Commission is pushing a “radical expansion” of its rules in accusing a broker-dealer and a transfer agent of assisting a scheme to create sham companies and sell free- trading stock to the public, the two businesses told a Florida federal court.

The SEC is seeking to enforce a higher standard for market-makers than its own rules require, broker-dealer Spartan Securities Group Ltd. and transfer agent Island Capital Management LLC argued Friday. Spartan, Island Capital, two directors and both companies’ chief compliance officer said they had met their legal obligations and should be given a win in the case.

Published in Law360