Portfolio Advisors Alliance, Inc. (CRD #101680, New York, New York) and Marcelle Long (CRD #2679335, Registered Principal, Atlanta, Georgia) recently submitted an Offer of Settlement in which the firm was censured and fined $35,000. Long was fined $7,500 and suspended from association with any FINRA member in any principal or supervisory capacity for 30 days. Without admitting or denying the allegations, the firm and Long consented to the described sanctions and to the entry of findings that they failed to put any heightened supervisory measures in place for a branch manager or to follow up on “red flags.” The findings stated that notwithstanding the branch manager’s remote location, prior disciplinary history, outside business disclosures or his disclosure that he was potentially under financial stress and unable to meet financial obligations, the firm and Long failed to put any heightened supervisory measures in place or to follow up on the red flags after he disclosed information on a compliance questionnaire, for which the affirmative answer required that he attach a separate sheet providing complete details about the disclosed activities, which Long did not complete or enforce.
The findings also stated that the firm’s and Long’s heightened supervision of the branch manager was inadequate in that it consisted only of inspecting his office annually and speaking on the phone on a fairly regular basis. The findings also included that Long inspected the branch manager’s branch office, and although she was aware that the manager was involved in certain outside business activities, based on the disclosures that he made on his Uniform Application for Securities Industry Registration or Transfer (Form U4), she admitted that she did not inspect any files or financial records associated with his disclosed outside business activities and did not detect any undisclosed outside business activities or private securities transactions.
FINRA found that during a subsequent inspection, Long again did not review documentation regarding the branch manager’s disclosed outside business activities and did not detect any undisclosed outside business activities or private securities transactions. FINRA also found that the branch manager had participated in private securities transactions wherein he had raised more than $1.5 million from investors, many of whom were firm customers. In addition, FINRA determined that the firm and Long failed to review or retain email communications on the branch manager’s outside email account, and Long did not review his outside email account during her inspections of his branch office. Moreover, FINRA found that the firm did not have any supervisory procedures regarding the review and retention of email communications on outside email accounts.
The suspension was in effect from May 16, 2011, through June 14, 2011.
This information which is publicly available on FINRA’s website has been provided by The White Law Group, LLC.
If you have questions about investments you made with Portfolio Advisors Alliance, Inc. and/or Marcelle Long, the securities attorneys of The White Law Group may be able to help. To speak with a securities attorney, please call the firm’s Chicago office at 312/238-9650.
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