Alex Williams (CRD# 2646185), a broker and investment adviser based in New York, has received a pending customer complaint. According...Read More
James Armstrong Jr.: Royal Alliance Advisor Suspended by FINRA
A disciplinary action taken by the Financial Industry Regulatory Authority against Wake Forest, North Carolina broker and investment advisor James Armstrong Jr. (CRD#) suspended him over allegations he failed in his supervisory duties. A representative of Royal Alliance Associates, Armstrong was suspended from acting in a principal capacity for three months and fined $7,500.
According to a Letter of Acceptance, Waiver and Consent () dated December 2018, James Armstrong Jr. was a general securities principal and representative at Royal Alliance Associates in Wake Forest, North Carolina, when he failed to supervise a representative under his control between February 2012 and March 2015. The representative’s alleged underlying conduct included unsuitable recommendations to four elderly customers whose accounts he over-concentrated in precious metal securities, according to FINRA, and whom he recommended the purchase and holding of investments in leveraged mutual funds and/or exchange-traded funds for extended periods.
According to FINRA, James Armstrong Jr. held day-to-day supervisory responsibility over the representative, but “ignored red flags indicating possible unsuitable activity in customer accounts.” Specifically, according to FINRA, he did not independently investigate the suitability of the trades in question after he received trade alerts about them; instead, FINRA states, he “relied exclusively” on the representative’s assurances that the investors “understood and accepted the risk” of the representative’s trading in their accounts. FINRA goes on to state that Armstrong Jr. identified a number of trades that were inconsistent with the customers’ risk tolerances; however, according to FINRA, he did not investigate the trades’ suitability, and allowed the representative to increase the customers’ risk tolerances in alignment with the activity, without contacting the investors in question. He later raised concerns about the trades with his supervisor, James Armstrong Sr., who did not take any action against the representative; FINRA states that “notwithstanding the concerns he raised,” Armstrong Jr. kept approving the representative’s “high-risk trading activity.” He also allegedly failed to reasonably supervise the representative’s emails, according to FINRA, and did not review selected emails based on keyword searches and sampling, and consequently failed to detect “an unreported customer complaint against” the representative.
FINRA’s findings state that the foregoing alleged conduct constituted violations of FINRA Rules 3110(a) and 2010, as well as NASD Conduct Rule 3010(a). James Armstrong Jr. was consequently suspended from acting in all principal capacities for three months and ordered to pay a fine of $7,500.
James Armstrong Jr. has been registered with Royal Alliance Associates’ Wake Forest, North Carolina office since 2002. His employment history lists no other firms. He currently holds 46 state licenses and has passed seven securities industry qualification examinations.