According to FINRA, Alpine Securities Corporation has been expelled from FINRA membership and ordered to pay $802,678.77 in restitution to customers following a National Adjudicatory Council (NAC) decision that found the firm engaged in serious misconduct affecting customer accounts.
The Salt Lake City-based firm was found in violation of multiple FINRA rules related to customer protection. The NAC determined that Alpine implemented an unreasonable and unfairly discriminatory $5,000 monthly account fee that was not related to any service provided to customers. Instead, the fee was intentionally designed to compel account closures or extract revenue from remaining customers.
The violations extended beyond excessive fees. Alpine was found to have made unauthorized transfers of securities and misused customer assets. The firm took funds and securities from customer accounts without authorization to pay for the unreasonable monthly fees. In a particularly concerning action, over a three-day period, the firm unilaterally removed securities positions worth $1,500 or less from all customer accounts by deeming them "worthless." This affected 2,235 securities positions valued at $349,340 across more than 1,400 accounts.
The firm also treated certain accounts as "abandoned" and transferred securities without customer consent. Additionally, FINRA found that Alpine paid unfair prices in principal transactions where it imposed a market-making fee, and made an unauthorized withdrawal of firm capital totaling $610,372.98.
For investors, this case highlights the importance of monitoring account statements for unexpected fees and unauthorized transactions. If you notice charges you didn't authorize or securities disappearing from your account, contact your broker-dealer immediately and consider filing a complaint with FINRA. Firms have a fiduciary duty to act in customers' best interests, and charging arbitrary fees or removing securities without consent violates fundamental investor protections.
The sanctions are currently not in effect pending SEC review, as the firm has appealed the decision.
