Supreme Alliance LLC Sanctioned by FINRA for Supervisory Failures
The Financial Industry Regulatory Authority (FINRA) has reportedly censured and fined Supreme Alliance LLC $80,000 for multiple supervisory failures involving variable annuity transactions and inadequate due diligence in hiring registered representatives.
FINRA Findings and Sanctions
According to FINRA, between September 2019 and May 2022, Supreme Alliance failed to establish and maintain a supervisory system reasonably designed to oversee the recommendations and sales of deferred variable annuities.
FINRA found that the firm violated several rules, including:
- Exchange Act Rule 15l-1(a)(1) (Regulation Best Interest),
- FINRA Rules 3110(a), (b), (e) – supervision and due diligence in hiring,
- FINRA Rules 2330(c)–(d) – supervision of variable annuity recommendations, and
- FINRA Rule 2010 – standards of commercial honor and just and equitable principles of trade.
Specifically, FINRA found that Supreme Alliance:
- Failed to adequately review and record variable annuity transactions;
- Did not conduct or document reasonable background investigations for newly hired brokers; and
- Lacked surveillance systems to identify inappropriate rates of variable annuity exchanges.
For these violations, the firm was censured and fined $80,000 and required to engage an independent consultant to review and improve its supervisory policies and procedures.
Previous Disciplinary Action
This is not the first time the firm has faced regulatory action. In February 2018, Supreme Alliance entered into a similar Letter of Acceptance, Waiver and Consent (AWC) with FINRA, agreeing to a censure and the retention of an independent consultant for supervisory failures related to its review of variable annuity transactions and hiring practices.
Variable Annuity Risks for Investors
Variable annuities can be high-commission, complex investment products that are not suitable for all investors—especially seniors or those with shorter investment horizons. Excessive trading or “churning” of annuity products can generate commissions for brokers while eroding potential returns for investors.
FINRA Arbitration and Investor Recovery
If you suffered losses investing with Supreme Alliance LLC or one of its registered representatives, you may be able to recover your losses through FINRA arbitration. The White Law Group represents investors in FINRA claims nationwide against brokerage firms for unsuitable investment recommendations, lack of supervision, and broker misconduct.
Our firm has handled over a thousand FINRA arbitration cases involving complex products such as variable annuities, REITs, and other alternative investments.
Free Consultation
If you believe your financial advisor at Supreme Alliance LLC misrepresented investment risks or made unsuitable recommendations, contact The White Law Group for a free consultation at (888) 637-5510 or visit whitesecuritieslaw.com.
Frequently Asked Questions
1. What did FINRA fine Supreme Alliance LLC for?
FINRA fined Supreme Alliance $80,000 for failing to supervise variable annuity recommendations, properly review broker backgrounds, and monitor for excessive annuity exchanges, violating multiple FINRA and SEC rules.
2. Are investors affected by these violations?
Yes. Inadequate supervision may allow unsuitable or high-fee investments to be sold to clients without proper oversight, potentially resulting in significant financial losses.
3. How can investors recover losses from Supreme Alliance?
Investors can pursue claims through FINRA arbitration, an alternative dispute resolution forum designed for securities disputes. The White Law Group represents investors nationwide in these types of cases.
