Advisor Group units fined for capital violations

Finra censures Royal Alliance, FSC, SagePoint, Woodbury, levies $550,000 in fines

May 4, 2017 @ 2:30 pm

By InvestmentNews

Four units of the Advisor Group have been censured and fined by Finra for miscalculating their advisory fee income, resulting in net capital deficiencies and financial reporting inaccuracies.

According to a letter of acceptance, waiver and consent, the firms — Royal Alliance Associates, FSC Securities Corp., SagePoint Financial and Woodbury Financial Services — agreed to censures and fines of $260,000, $150,000, $75,000 and $65,000, respectively. The violations occurred between January 2010 and April 2016 in the case of Royal Alliance, FSC and SagePoint, and between January 2014 and March 2016 at Woodbury.

All the firms had errors in their general ledgers, balance sheets and trial balances, and net capital computations, Finra said, and because of those errors, Royal Alliance, FSC and SagePoint were operating in violation of the net capital rule for one month.

American International Group in January 2016 sold what was then called the AIG Advisor Group to private-equity firm Lightyear Capital and Canadian pension manager PSP Investments.

In addition to censuring and fining the firms, Finra fined Inger Wilson Fields $5,000 for her role as financial and operations principal for the firms and suspended her for a month from working in that capacity with any Finra member firm.

In response to a request for comment, a spokesperson for the Advisor Group emailed: "The Advisor Group family of advisory firms (Royal Alliance Associates, FSC Securities Corp., SagePoint Financial and Woodbury Financial) is pleased to have successfully concluded Finra's inquiry into legacy accounting practices related to prepaid investment advisory fees. As a matter of policy, Advisor Group does not comment on regulatory settlements."

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