Published on:

SEC Files Complaint against Royal Alliance Associates

Publicly available records released by the Securities and Exchange Commission (SEC) on March 14, 2016 indicate that the SEC has filed a complaint against New York-based brokerage/advisory firm Royal Alliance Associates. The securities and investment fraud law firm Fitapelli Kurta is interested in hearing from investors who have complaints regarding Royal Alliance Associates (CRD# 23131).

Formed in Delaware in 1988, Royal Alliance Associates is headquartered in New York, New York and registered with 52 US states and territories. Dmitry Goldin is President and Chief Executive Officer; Robert Guldner is Chief Compliance Officer, Investment Advisory; Inger Fields is Vice President, Treasurer, and Financial Operations Principal; Matthew Schlueter is Chief Operations Officer; Erica McGinnis is Chairperson; Justin Sacca is Executive Vice President and Chief Compliance Officer; Noah Sorkin is Executive Vice President, General Counsel, and Secretary; Thomas Sidlo is Municipal Principal.  Royal Alliance Associates is indirectly owned by American Investment Group (AIG).

According to the SEC’s complaint, from 2012 to 2014, Royal Alliance Associates invested advisory clients in certain mutual fund share classes that came with 12b-1 fees, rather than lower-fee share classes of those same funds that had no such fees. The clients in question were invested in “accounts that are not qualified retirement or ERISA accounts, where 12b-1 fees are rebated.” Consequently, Royal Alliance Associates and two co-respondents received approximately $2 million in 12b-1 fees they would not otherwise have collected from lower-fee share classes.

The SEC additionally alleges that Royal Alliance Associates failed to disclose in its Forms ADV that it had a conflict of interest resulting from the financial incentive to place non-qualified clients in these higher-fee share classes. Royal Alliance Associates allegedly breached its fiduciary duty by investing clients in higher-fee classes, and “failed to adopt any compliance policy governing mutual fund share class selection.” The SEC also alleges that in 2013 Royal Alliance Associates failed to monitor advisory accounts on a quarterly bases for either inactivity or reverse churning, as required by compliance policies.

Royal Alliance Associates was ordered to pay disgorgement and other monetary penalties totaling more than $10 million dollars.

If you have lost money investing with Royal Alliance Associates, or one of their brokers, you may be able to recover your losses. Call the securities and investment fraud law firm Fitapelli Kurta at 877-238-4175 for a free consultation. All cases are taken on a contingency basis: Fitapelli Kurta only gets paid if and when you collect funds.  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.