Alpine Securities Corporation, a securities broker dealer headquartered in Salt Lake City, Utah, has been expelled as a securities broker dealer and ordered to cease and desist violating FINRA rules founded on findings of Alpine Securities Corporation’s misuse and conversion of customer funds, as well as its mismanagement and unauthorized trading in customer accounts. Department of Enforcement v. Alpine Securities Corporation, Extended Hearing Panel Decision, Disciplinary Proceeding No. 2019061232601 (March 22, 2022).
According to the decision, Alpine Securities imposed unreasonable account fees while it was facing financial difficulties in operating its retail business. The securities broker dealer told customers that it would charge them $5,000.00 per month just to maintain their accounts. FINRA states that Alpine Securities Corporation violated FINRA Rule 2010.
The regulator also states that unfair commissions and prices were charged to customers, as Alpine Securities appropriated customer accounts, reducing the value of customers’ shares to one cent per position. This happened for any accounts valued at $1,500.00 or less. Customers were also charged a 2.5 percent execution or market-making fee. The securities broker dealer violated FINRA Rules 2010 and 2121 for excessive charges.
The Extended Hearing Panel additionally found that Alpine Securities Corporation misused and converted customer funds. The regulator notes that customers’ securities were, without justification, deemed worthless and abandoned. Customers’ securities were stripped by the securities broker dealer when the customers’ accounts contained debits for unreasonable and excessive fees. Alpine Securities Corporation violated FINRA Rules 2010 and 2150.
Unauthorized transactions also included Alpine Securities Corporation’s transfer of customers’ accounts to the firm’s own accounts, all without customers consenting to the transactions. The securities broker dealer violated FINRA Rule 2010 for this reason.
