Abstract： The Financial Industry Regulatory Authority (FINRA) has announced that Supreme Alliance LLC has agreed to pay a fine of $80,000 as part of a settlement addressing supervisory and compliance failures related to variable annuity transactions and representative investigations.
The Financial Industry Regulatory Authority (FINRA) has announced that Supreme Alliance LLC has agreed to pay a fine of $80,000 as part of a settlement addressing supervisory and compliance failures related to variable annuity transactions and representative investigations.
Background of the Case
Between September 2019 and May 2022, Supreme Alliance reportedly failed to establish and maintain a supervisory system and written supervisory procedures that were reasonably designed to oversee the recommendations and exchanges of deferred variable annuities.
The firm also failed to properly document and conduct investigations into newly hired registered representatives, as required under FINRA Rule 3110(e). This rule is designed to ensure that firms perform background checks and compliance reviews to prevent misconduct and protect investors.
Details of the Violations
According to FINRAs findings, Supreme Alliance did not surveil for inappropriate rates of variable annuity exchanges, exposing clients to potential risks and unsuitable trading activity.
As a result, the firm was found in violation of:
- Exchange Act Rule 15l-1(a)(1) — addressing best-interest obligations for conduct after June 30, 2020.
- FINRA Rules 3110(a), (b), and (e) — concerning supervisory systems and due diligence on new hires.
- FINRA Rules 2330(c)–(d) — governing deferred variable annuity recommendations and exchanges.
- FINRA Rule 2010 — requiring members to uphold high standards of commercial honor.
Outcome and Sanctions
In addition to the $80,000 fine, FINRA also issued a censure against Supreme Alliance LLC.
While the firm neither admitted nor denied the findings, it consented to the entry of FINRAs findings and the imposed sanctions.
About Supreme Alliance LLC
Founded in 1998, Supreme Alliance LLC is headquartered in Charlotte, North Carolina. The firms operations include the distribution of mutual funds and variable life insurance or annuities.
According to FINRA records, Supreme Alliance maintains approximately 40 registered representatives across four active branches.
Conclusion
This latest enforcement action highlights FINRAs ongoing focus on ensuring that member firms maintain robust supervisory systems and compliance procedures, particularly when dealing with complex investment products such as variable annuities.
By enforcing these standards, FINRA aims to protect investors and uphold the integrity of the financial markets.
