by Admin Istrator | November 3, 2021 9:47 pm
Royal Alliance Associates, Inc, is a dual-registered broker-dealer and investment adviser with its main offices in Jersey City, New Jersey. The company currently has 78 disclosure events recorded at FINRA. Disclosure events refer to criminal matters, regulatory actions, civil judicial proceedings, and similar items that must be reported by brokerage firms or regulators to FINRA.
In this article, we will detail some of the events that resulted in higher fines. We will also offer advice should any investor want to sue Royal Alliance Associates, Inc, or seek reparation for any matters of fiduciary negligence.
Two employees of Royal Alliance Associates defrauded four customers of more than $3.8 million, according to the Letter of Acceptance, Waiver and Consent (AWC) that Royal Alliance submitted to FINRA, proposing a settlement.
By its own admission, Royal Alliance failed to enforce its policies and procedures for third-party payments. As a result, two employees, not working together, were able to steal customer funds by “directing wire transfers or checks from customer accounts into accounts for entities [the employees] created.” There were other red flags for some of the transactions that Royal Alliance also failed to act on.
The first of the employees stole the majority of money from a disabled widow, a total of over $1.2 million. There were over 60 wire transfers that went through because of ignored red flags or failure to follow policies regarding third-party transfers, according to Royal Alliance’s AWC.
The second employee stole over $2 million from a customer through 65 wire transfers.
For failing to enforce its own policies, Royal Alliance Associates accepted the fine of $400,000 imposed by FINRA, without accepting or denying the charges.
On November 13, 2020, Royal Alliance Associates accepted a $500,000 penalty from the SEC and was given a cease-and-desist order for allegedly violating certain clauses of the Investment Adviser’s Act of 1940.
The SEC said that, during the period from January 2016 to April 2020, Royal Alliance Associate representatives bought certain risky and complex products for an extended period of time. The SEC said that Royal Alliance did have policies that cautioned against holding similarly risky and complex products, but no policies regarding this specific product existed. As a result, Royal Alliance provided no specific training for these particular products, the SEC said. In this regard, the SEC claimed that Royal Alliance violated certain clauses of the Investment Advisers Act of 1940.
Royal Alliance neither denied nor admitted guilt for the allegations, but it consented to settle the case through a monetary fine of $500,000, as well as other sanctions imposed by the SEC.
In an AWC submitted to FINRA, signed on July 6, 2018, Royal Alliance laid out the facts that it failed to “reasonably supervise” the sale, by its representatives, of complex variable annuity products. It also failed to provide training to its representatives and principals on the sale and supervision of these variable annuities.
Variable annuities are complicated instruments with many different options and riders possible. They can be difficult for investors to understand. This was one of the reasons that FINRA issued Rule 2330 to “enhance firms’ compliance and supervisory systems, and provide more comprehensive and targeted protection to investors.”
Between February 2014 and December 2015, Royal Alliance received over $61.9 million from the sale of variable annuities, according to the AWC, and yet it failed to “implement a supervisory system and procedures reasonably designed to ensure suitability.”
Royal Alliance consented to sanctions and a fine of $350,000 without admitting or denying the allegations.
In 2016, Royal Alliance accepted a fine of $7.5 million, without admitting or denying the SEC’s charges. The SEC said that Royal Alliance incorrectly placed clients in a share class with higher expense costs when a lower expense class was available. This was a conflict of interest that should have been reported to the client, said the SEC.
The SEC also said that the firm did not monitor certain wrap accounts in a timely manner, pursuant to the firm’s written policies.
Royal Alliance Associates, Inc is registered with FINRA, which means that any complaint would likely be handled through binding arbitration. Contact one of our attorneys at 800-767-8040 to discuss your complaint against Royal Alliance Associates. 
Source URL: https://mdf-law.com/royal-alliance-customer-complaints/
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