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Royal Alliance Associates: 60+ Customer and Regulatory Complaints

Royal Alliance AssociatesPublicly available records published by the Financial Industry Regulatory Authority (FINRA) and accessed on April 4, 2019 indicate that New Jersey-based broker-dealer firm Royal Alliance Associates has received more than 60 complaints from customers and regulatory authorities. Fitapelli Kurta is interested in hearing from investors who have complaints regarding Royal Alliance Associates (CRD# 23131).

Established in Delaware in 1988, Royal Alliance Associates is headquartered in Jersey City, New Jersey and registered with 52 US states and territories. According to its BrokerCheck report, it has received 38 regulatory complaints, including one pending complaint, and 29 customer complaints that evolved into arbitration and resulted in an award to the claimant.

In January 2019 the Massachusetts Securities Division named Royal Alliance Associates respondent in a complaint alleging it failed to supervise a representative’s allegedly unsuitable recommendation of a fixed annuity exchange. The Division is seeking restitution, a cease and desist order, censure, and disgorgement in the pending complaint.

In 2019 a FINRA arbitration panel awarded $4.2 million to a customer after finding that a former Royal Alliance Associates broker, Gary Basralian, “stole money from her,” according to Investment News. Mr. Basralian, a 71-year-old, had previously admitted in a plea agreement that he stole “at least $2 million from his clients” and directed it toward personal expenses such as car and credit card payments. A FINRA panel found him and the firm “each liable for $2.1 million and another $500,000 each in attorneys’ fees.” According to the award in that proceeding, the causes of action alleged included conversion of funds, negligent supervision, violations of the Racketeer Influenced and Corrupt Organizations Act, common law fraud, violation of the New Hampshire Securities Act, and breach of contract. Mr. Basralian was barred from the securities industry in March 2018 and resigned from Royal Alliance Associates in 2017.

In 2018 FINRA sanctioned Royal Alliance Associates in connection to allegations it failed in its supervisory duties concerning the sales by its representatives of multi-share class variable annuities. According to FINRA’s findings, the firm’s written supervisory procedures failed to address suitability issues related to the varying surrender periods, fees, and costs of varying share classes of variable annuity products, and additionally failed to address suitability issues that come up when an L-share contract is sold with a long-term income rider or sold to an investor whose investment horizon is on the longer side. In connection with these findings, the firm was censured and issued a fine of $350,000.

In 2017 FINRA sanctioned Royal Alliance Associates in connection to allegations it disadvantaged retirement plan and charitable organizational clients who were eligible to purchase mutual fund share classes that did not have front-end sales charges. The firm was censured and issued a fine of $150,000.

In May 2017 FINRA sanctioned Royal Alliance Associates in connection to allegations it “applied an inaccurate accounting and net capital treatment of fees.” The firm was censured and issued a fine of $260,000.

In 2016 the SEC sanctioned the firm in connection to allegations it breached its fiduciary duty and committed compliance failures by investing customers in mutual fund classes with 12B-1 fees rather than lower-fee share classes that were available for those customers. The firm was censured and issued a fine of $7.5 million.

In 2015 FINRA sanctioned the firm in connection to allegations it failed to identify and apply certain sales charge discounts to eligible unit investment trust purchases. The firm was censured and issued a fine of $225,000.

In 2015 the Nevada Division of Insurance sanctioned the firm in connection to allegations it failed in its supervisory duties concerning the sale of variable annuities. The firm was censured and issued a fine of $21,000.

In 2015 a customer alleged the firm breached contract, failed in its supervisory duties, misrepresented and omitted material facts, acted negligently, and breached its fiduciary duty in connection to investments in common stock, reverse convertibles, and a real estate investment trust. The complaint resulted in an award to the customer of more than $200,300.

In 2014 a customer alleged the firm made misrepresentations and omissions of material facts, breached its fiduciary duty, breached contract, failed in its supervisory duties, and acted negligently. The complaint resulted in an award to the customer of more than $80,600.

In 2014 a customer alleged the firm breached its fiduciary duty, misrepresented and omitted material facts, made unsuitable investment recommendations, failed in its supervisory duties, breached contract, and acted negligently in connection to variable annuity investments. The complaint resulted in an award to the customer of more than $884,200.

In 2014 a customer alleged the firm breached its fiduciary duty, misrepresented and omitted material facts, made unsuitable investment recommendations, failed in its supervisory duties, and acted negligently. The complaint resulted in an award to the customer of $1,105,000.

In 2013 the Massachusetts Securities Division sanctioned the firm in connection to allegations its representatives sold non-traded real estate investment trusts in a concentration that exceeded heightened concentration limits imposed by the prospectus. The firm was censured and issued a fine of $25,000.

In 2013 a customer alleged the firm misrepresented and omitted material facts, failed in its supervisory duties, breached contract, acted negligently, and breached its fiduciary duty. The complaint resulted in an award to the customer of more than $1.4 million.

In 2012 a customer alleged the firm breached its fiduciary duty, misrepresented and omitted material facts, breached contract, acted negligently, and failed in its supervisory duties in connection to investments in mutual funds, private equities, a real estate investment trust, and variable annuities. The complaint resulted in an award to the customer of more than $472,200.

In 2011 FINRA sanctioned the firm in connection to allegations it allowed the association of two individuals who were statutorily disqualified. The firm was censured and issued a fine of $175,000.

In 2010 a customer alleged the firm breached its fiduciary duty, made misrepresentations and omissions of material facts, recommended unsuitable investments, breached contract, failed in its supervisory duties and acted negligently. The complaint resulted in an award to the customer of $1,403,500.

In 2010 a customer alleged the firm breached its fiduciary duty, breached contract, failed in its supervisory duties, and acted negligently. The complaint resulted in an award to the customer of $320,238.

In 2009 the SEC sanctioned the firm in connection it failed to supervise a representative who “operated a Ponzi scheme and defrauded investors,” misappropriated investor monies for his personal use, and disseminated to investors fictitious account statements. The firm was censured and ordered to pay a fine of $500,000.

In 2007 FINRA sanctioned the firm in connection to allegations it failed in its supervisory duties in that its system for detecting the rapid turnover of mutual funds, resulting in the execution by a representative of unsuitable mutual fund switches in customer accounts that the firm neither detected nor investigated. It was censured and issued a fine of $200,000.

In 2007 the State of Connecticut sanctioned the firm in connection to allegations it failed to supervise the conduct of a former representative who allegedly misappropriated customer funds, created fictitious statements that overstated holdings, and was later sentenced to 170 months in federal prison “for defrauding senior citizens of approximately $4.2 million.” The firm was issued a fine of $750,000.

In 2007 a customer alleged the firm made misrepresentations and omissions of material facts and recommended unsuitable investments. The complaint resulted in an award to the customer of more than $859,000.

In 2005 the NASD sanctioned the firm in connection to allegations it failed to properly supervise a representative who had been statutorily disqualified so as to achieve a compliance with a heightened supervision order. The firm was censured and issued a fine of $100,000.

In 2005 the NASD sanctioned the firm in connection to allegations it maintained revenue sharing programs with mutual fund complexes who paid the firm a fee in exchange for “preferential marketing and distribution access,” and who paid fees “by directing mutual fund portfolio brokerage commissions” to Royal Alliance Associates in violation of NASD conduct rules, which the NASD also alleged failed to maintain emails during the relevant time period as mandated by certain books and records rules. The firm was censured and issued a fine of $6.6 million.

In 2005 a customer alleged the firm breached its fiduciary duty and failed in its supervisory duties in connection to real estate investment trust securities. The complaint resulted in an award to the customer of more than $1.8 million.

In 2004 the SEC sanctioned the firm in connection to allegations it failed in its supervisory duties regarding the mutual fund sales practices of a branch manager and registered representatives. The firm was censured and issued a fine of $150,000.

In 2003 a customer alleged the firm made misrepresentations of material facts, made omissions of material facts, acted negligently, and made unsuitable investment recommendations. The complaint resulted in an award to the customer of more than $563,400.

In 2003 a customer alleged the firm breached its fiduciary duty, acted negligently, breached contract, and failed in its supervisory duties. The complaint resulted in an award to the customer of $554,620.

In 2003 a customer alleged Royal Alliance Associates failed in its supervisory duties, acted negligently, breached contract, and breached its fiduciary duty. The complaint resulted in an award to the customer of $170,917.

In 2001 the New Jersey Bureau of Securities sanctioned the firm in connection to allegations it failed to supervise two of its representatives it sold unregistered securities in a company they owned. The firm was ordered to pay restitution of $400,000 to affected investors.

In 2001 a customer alleged the firm breached its fiduciary duty, churned investments, made unsuitable investment recommendations, and failed in its supervisory duties. The complaint resulted in an award to the customer of more than $69,600.

In 2000 the National Association of Securities Dealers sanctioned the firm in connection it allowed associated individuals to act “in the capacity of registered persons” though their registration statuses were not active. The firm was censured and issued a fine of $20,000.

In 1998 a customer alleged the firm executed unauthorized trades, churned investments, and breached its fiduciary duty. The complaint resulted in an award to the customer of more than $946,700.

In 1996 a customer alleged the firm made unsuitable investment recommendations and breached its fiduciary duty in connection to limited partnership investments. The complaint resulted in an award to the customer of $18,950.

In 1996 a customer alleged the firm engaged in manipulation and made unsuitable investment recommendations. The complaint resulted in an award to the customer of more than $20,300.

If you or someone you know has lost money investing with Royal Alliance Associates, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.

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