oyal Alliance Associates’ Kimberly Pine Kitts Defrauded Investors
Kimberly Pine Kitts (CRD#: 2768200, Orleans, Massachusetts), who is past Royal Alliance Associates, Inc. investment adviser representative, pleaded guilty to a United States Attorney for the District of Massachusetts’ criminal charges including investment adviser fraud, wire fraud and identify theft. Kitts admitted to her role in defrauding investors out of the $3,000,000.00 held in their retirement and brokerage accounts.
The Securities and Exchange Commission (“SEC”) has also charged Kitts in a civil complaint dated July 19, 2018. SEC’s Complaint alleges that Kitts forged investors’ signatures on withdrawal requests so that she could misappropriate investors’ assets from their annuities and investment accounts, and misled an investor to withdrawal monies from a retirement account so that the funds could be furtively transferred to Kitts’ own bank account. A summary of Kitts’ alleged fraudulent schemes is contained below:
Kimberly Pine Kitts Allegedly Misappropriated Customers’ Variable Annuity Funds
The Complaint stated that Kitts’ advisory customers purchased variable annuities – insurance products that are designed to provide policyholders with income payments. SEC stated that from July 2011 to June 2013, Kitts made withdrawals from six customers’ annuities without receiving permission from them. In the process, Kitts forged customer’ signatures on withdrawal forms and instructed the insurance companies to send the customers’ money to Kitts’ Marquis bank accounts. Kitts set in motion 24 unauthorized withdrawals from customers’ accounts. In sum, she directed $962,654.00 to her bank accounts by way of those 24 withdrawals so that she could use the money for herself.
Kimberly Pine Kitts Allegedly Misappropriated Money From Customers’ Brokerage Accounts
SEC’s Complaint stated that Kitts also stole three customers’ funds from their brokerage accounts in 2013. Customer A held accounts with Kitts over a seven year period. And Customers B and C – a retired couple – held accounts with Kitts for twelve years.
In particular, on June 24, 2013, Kitts allegedly forged Customer A’s signature on a wire request form, directing the transfer of $75,000.00 to a Marquis bank account. The funds were supposed to be credited to Customer A, but Kitts used Customer A’s money for herself instead. Afterward, Kitts tried to conceal her fraud by providing Royal Alliance Associates with fake documents about Customer A owning Marquis, LLC. Yet, Marquis, LLC did not exist. Furthermore, Customer A did not create the company, and did not know about Kitts’ activities.
From 2013 to 2017, Kitts made fifty-six withdrawals without Customer A’s permission. By making those unauthorized withdrawals, Kitts misappropriated a total of $2,014,887.00 from Customer A, depleting Customer A’s brokerage account. Kitts also stole funds that belonged to Customers B and C, according to the Complaint. Apparently, Kitts forged a request to move $125,000.00 from the customers’ brokerage account to a Marquis bank account.
Kimberly Pine Kitts Mislead A Customer Into Executing A Retirement Account Withdrawal
SEC’s Complaint stated that Kitts steered Customer B into moving $200,000.00 from Customer B’s individual retirement account to another managed account. Customer B apparently signed forms to execute this transfer because of believing the money would be moved to the managed account. However, Kitts concealed the destination of those funds. Supposedly, $200,000.00 was transferred from Customer B’s individual retirement account into Kitts’ Marquis account.
For this reason, SEC requested that the United States District Court issue a permanent injunction to enjoin Kitts from engaging in violations of federal securities laws. Also, SEC requested that Kitts be ordered to disgorge the ill-gotten gains and pay a civil penalty.
Customer-Initiated, Investment-Related Complaints Against Kimberly Pine Kitts
Kitts disclosed on her FINRA BrokerCheck Report that at least four customers have filed disputes in regard to Kitts’ activities:
November 7, 2017 Complaint
A customer of Royal Alliance Associates filed a complaint on November 7, 2017. Counsel for the customer alleged that Kitts converted or misappropriated the customers’ funds. After reviewing the matter, on May 11, 2018, Royal Alliance settled the customer’s claim by paying the customer $1,969,086.87.
April 10, 2013 Complaint
A Royal Alliance Associates customer filed a complaint about Kitts on April 10, 2012. As indicated in the complaint, Kitts gave the customer bad advice about stock investments. Namely, Kitts apparently chose an investment strategy that caused the customer to incur unreasonable losses. Because of this, the customer requested a total of $24,778.00 in damages. However, Royal Alliance Associates denied the customer’s complaint on April 10, 2012.
June 22, 2010 Complaint
On June 22, 2010, a customer of Royal Alliance Associates, Inc. filed a complaint. It was the customer’s position that there were variable annuity exchanges that had been effected without regard to the customer’s best interest. Those exchanges apparently caused the customer to sustain losses on the account value and death benefit value. Consequently, the customer demanded $44,000.00 in damages. Nevertheless, Royal Alliance denied the customer’s allegations.
December 17, 2008 Complaint
Several Royal Alliance Associates customers brought a complaint on December 17, 2008. They contended that Kitts did not execute their order to terminate their mutual fund accounts. As a result of Kitts’ alleged execution failure, the customer’s demanded $180,000.00 in damages. However, this complaint was not pursued by the Royal Alliance Associates customers after March 23, 2010.
FINRA BrokerCheck shows that Royal Alliance Associates Inc. disaffiliated with Kitts on November 15, 2017 because of reports that Kitts possibly converted or misappropriated a customer’s funds.
Investors who have incurred losses from Royal Alliance Associates broker Kimberly Pine Kits are welcome to contact Soreide Law Group at (888) 760-6552 for a free consultation. Our firm has recovered millions of dollars for investors who have suffered losses. We represent clients on a contingency fee basis and advance all costs.