Account Executive and Stock Broker Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.
Royal Alliance Associates, Inc. (CRD #23131, New York, New York) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $175,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it permitted two former representatives to be associated with the firm while they were statutorily disqualified as a result of state regulatory actions brought against them. The firm reviewed certain filings made in connection with these actions but allowed them to continue to be associated with the firm until several months later. The findings stated that the firm failed to timely and accurately file required Form U4 updates for the individuals reflecting these state actions and failed to timely make the required NASD Rule 3070 filings with respect to the state regulatory actions. The findings also included that the firm failed to reasonably supervise the individuals to ensure that they made required disclosures regarding their outside business activities. The firm failed to determine whether any additional disclosures were necessary despite numerous indications that these individuals were engaged in the activities at their outside business.
FINRA found that the firm failed to reasonably supervise these individuals to ensure they made appropriate disclosures regarding the state regulatory actions. One of the individuals had discussions with various individuals at the firm, including his supervisors, concerning certain state regulatory actions. Despite knowledge of those state regulatory actions, the firm failed to determine whether these actions required disclosure by these individuals and failed to require any disclosures. (FINRA Case #2009017644201).