The Pennsylvania Department of Banking and Securities has fined Newbridge Securities of Boca Raton, Fla., a state-record $499,000 for failing to "maintain a reasonable system for applying and enforcing written procedures" for the sale of derivative securities by the firm's agent in Pennsylvania from 2012 to 2016. The firm has consented to the fine, without admitting wrongdoing.

"This is the largest amount ever assessed by the department," against a single firm in a single enforcement action, department spokeswoman Virginia Lucy said, after a search of state records. .

The state did not name the agent. Records maintained by FINRA, the securities industry's self-regulatory arm, list Newbridge's agent in Pennsylvania as Austin Dutton, a registered broker who runs an office of Bridge Valley Financial Services, an arm of Newbridge. Dutton's clients including Philadelphia police officers and firefighters. He did not return calls Thursday. Newbridge president Thomas Casolaro did not return a call to his office in Boca Raton.

According to FINRA, Dutton has been in the business for 21 years, the last nine at Newbridge. In 2015 the firm settled a dispute with a Dutton customer who alleged negligence and other issues by paying the complaintant $15,000, while denying any wrongdoing. In 1997, Dutton was "allowed to resign" by Prudential Securities, also after admitting no wrongdoing, according to FINRA.

Dutton's practice has included the sale of real estate-backed securities issued by firms controlled by Nicholas Schorsch, son of a Jenkintown scrap-metal dealer who built a group of  real estate and investment sales companies controlling more than $30 billion of U.S. real estate at its height in the early 2000s.

Two senior officers of American Realty Capital Partners, one of Schorsch's public companies, admitted they had exaggerated profits in reports to investors and the Securities and Exchange Commission in 2014. One has since pleaded guilty to securities fraud, and a second was convicted at a trial last month. Schorsch, who has given up management positions in the public companies, has not been charged. He and former directors of his companies, who include former Pennsylvania Gov. Ed Rendell, are contesting investors' civil lawsuits accusing Schorsch of taking more cash from his companies than he was entitled to take.

The reorganization of Schorsch's companies made some of the investments Newbridge sold hard for investors to resell at the prices investors paid. "I made a $100,000 investment in one of those companies, Business Development Co. of America," Emil Tofton, a Montgomery County attorney who was a Dutton client, told me.

Although Tofton said he purchased the shares with the understanding that, as real estate investments, they were likely to maintain or gain value in the current economic environment, he was unable to sell them without taking what he considered significant losses. He bought the shares through Dutton's firm for $10.90 a share in Feb. 2013, and after many attempts was finally able to sell some of them in February at $8.50, at a loss of 21 percent, he told me. "It was hard to sell. It never gained value after I bought it."

He said family members who did business with Dutton bought shares of another Schorsch vehicle, Retail Centers of America. Those also traded below the purchase price, Tofton said. "The company seems to control the price. There are no other bidders. They got you," and investment management fees add up, he said.

In 2015, Dutton said that Philadelphia police and firefighters were a big part of his business, and that many were happy with the performance of the real estate-backed investments, which he promoted through emails and free dinners.

"A hundred retired policemen have said to me, 'You must be the smartest guy in the world. Or the dumbest guy in the world. Because you have all our money, and we know where you live, and we all carry guns.' There's an accountability here," he said at that time.

(This story was updated Friday to note that it is the largest action of its type in the state securities regulator's history.)