In a disciplinary proceeding, FINRA charged a broker-dealer in connection with imposing "exorbitant and arbitrary" customer account fees.
According to FINRA, Alpine Securities Corporation ("Alpine") imposed "unreasonable fees" to customers in the face of "significant" financial difficulties. The monthly account fee represented a 60,000 percent increase from the previous $100 annual fee. The firm allegedly seized and converted customers' securities when they did not pay the monthly fee.
FINRA charged the firm with violations related to (i) conversion of customer funds and securities, and misuse of customer assets (Rule 2150), (ii) unauthorized trading, unfair prices and commissions (Rule 2121), (iii) unreasonable and discriminatory fees (Rule 2122) and (iv) unauthorized capital withdrawals (Rule 4110(c)).
FINRA requested immediate intervention to stop Alpine's unauthorized trading and misuse of customer assets.
Commentary
The facts as alleged are not merely "regulatory" violations. They are not even sneaky enough to rise to the level of fraud. If true, they constitute plain and simple theft. One would hope matters like this go to DOJ, and not only to the SEC.
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