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Royal Alliance to pay $400,000 for Failure to Supervise

featured by Top Securities Fraud Attorneys, The White Law Group

Royal Alliance Reportedly Sanctioned for 2 imprisoned brokers who stole $3.8 million

According to the Financial Industry Regulatory Authority (FINRA) this week, Royal Alliance Associates, an independent broker dealer, was censured and fined $400,000 for allegedly failing to catch two former brokers who separately stole more than $3.8 million from the accounts of four customers and are now imprisoned.

In a Letter of Acceptance, Waiver & Consent (AWC), FINRA alleged that between 2009 and 2017, a New Jersey broker purportedly wire-transferred $1.4 million in more than 60 transactions from a New Hampshire widow who was reportedly disabled, to the bank account of his limited liability company and to a law firm.

Royal Alliance purportedly failed to stop the transfers, despite the company’s address being the same as the broker’s office, firm prohibitions against third-party wire transfers, and other red flags.

According to FINRA, the broker also purportedly forged requests for unauthorized third-party checks from the widow and another client’s account without the firm purportedly verifying the address the checks were sent to.

FINRA also reportedly alleged that a Massachusetts broker stole more than $2.3 million from two customers between June 2013 and June 2017 by purportedly forging 65 third-party wire transfer requests from their accounts to the bank account that the broker allegedly controlled.

FINRA claimed that when one cashiering group employee questioned a discrepancy in signatures, the broker allegedly claimed that the customer signed her name differently each time, without further investigation. The ex-broker also allegedly falsified papers when questions were raised about the account receiving the checks, which had the broker’s home address.

The AWC did not identify the brokers but said both pled guilty to criminal charges and are barred from the securities industry.

Royal Alliance reportedly discharged Kimberly Pitts, a Massachusetts broker who was reportedly sentenced to 87 months in prison and three years of supervised release in November 2017.

In December 2017, the firm also reportedly discharged Gary Basralian, a Maplewood, NJ, broker who is reportedly serving 70 months in prison after pleading guilty to fraud.

FINRA says in the AWC that the firm did compensate the clients who were disadvantaged by the two brokers.

Recovery of Investment Losses

When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

This information is publicly available on FINRA’s website and provided to you by The White Law Group. For a free consultation with a securities attorney, please call the offices at 888-637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group, visit whitesecuritieslaw.com.


Tags: , , , , , , , Last modified: December 20, 2022