SEC v. Royal Alliance Associates, Inc., SagePoint Financial, Inc. and FSC Securities Corporation (2016)

Settled

✓ Checked against the primary document on October 3, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In March 2016 the SEC settled with three AIG-owned broker-dealer and adviser firms, Royal Alliance Associates, SagePoint Financial and FSC Securities, over placing advisory clients in mutual fund share classes that paid the firms 12b-1 fees without disclosing the conflict, and over failing to monitor advisory accounts for inactivity. The firms jointly owe a $7.5 million penalty, $1,956,460 in disgorgement and $93,399 in interest.

The record

What was ordered

Civil penalty

$7.5m

Disgorgement

$2m

Prejudgment interest

$93.4k

Total relief

$9.5m

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The Securities and Exchange Commission announced this settled order on March 14, 2016 as file 3-17169. The respondents are Royal Alliance Associates, Inc., SagePoint Financial, Inc. and FSC Securities Corporation (0 individuals, 3 entities), who neither admitted nor denied the findings. Earlier versions of this record spliced the second and third firm into one name.

The order finds that from at least 2012 to 2014 the firms invested non-retirement advisory clients in mutual fund share classes carrying 12b-1 fees when cheaper classes of the same funds were available, collecting about $2 million they would not otherwise have earned, without disclosing the conflict on Form ADV or adopting a share-class policy. It also finds that in 2013 they failed to monitor wrap-fee accounts quarterly for inactivity, a check their own policies called for and that examiners had earlier cited.

The inactivity monitoring concerns "reverse churning", a wrap-fee account traded too little, which is the mirror image of the conduct this library's churning technique covers. No customer is found to have been traded excessively, so the record carries no technique tag. The respondents are jointly and severally liable for the $7.5 million civil penalty and for disgorgement of $1,956,460 with $93,399 of prejudgment interest, and were censured.

For the regulator's own account of the facts, read the primary document linked above.

Timeline

1. 2016-03-14 Administrative proceeding instituted (cease-and-desist)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Record added September 10, 2026. submit a correction.