Last Updated: February 2025
When investors trust their hard-earned money to financial professionals, they expect and deserve competent guidance and proper supervision. Unfortunately, First Allied Securities, Inc. (CRD# 32444) has faced numerous regulatory actions and customer complaints that raise serious concerns about their practices and supervision of financial advisors.
Understanding First Allied Securities
First Allied Securities was a broker-dealer and investment advisory firm headquartered in San Diego, California. The firm operated from 1994 until September 29, 2022, when it ceased operations. During its active years, First Allied offered various investment products including mutual funds, variable annuities, stocks, bonds, and alternative investments.
Troubling Patterns and Regulatory Issues
A review of FINRA BrokerCheck records reveals concerning patterns in First Allied’s regulatory history:
1. Supervision Failures
- Multiple instances of failing to adequately supervise financial advisors
- Insufficient written supervisory procedures
- Lack of proper monitoring systems for trading activities
- Inadequate oversight of variable annuity sales and exchanges
2. Sales Practice Violations
- Unsuitable investment recommendations
- Unauthorized trading
- Misrepresentation of investment products
- Failure to provide proper disclosures
- Improper mutual fund sales practices
3. Notable Regulatory Actions
The firm faced numerous significant regulatory actions, including:
- A 2019 action by the Connecticut Banking Commissioner resulting in a $30,000 fine for supervision failures
- A 2017 FINRA action requiring $408,459 in fines and $326,500 in restitution for improper mutual fund sales practices
- A 2016 SEC action resulting in $500,000 in fines and $1.4 million in restitution related to supervision failures
- Multiple state regulatory actions involving licensing violations and supervision issues
4. Customer Arbitration Awards
First Allied has been subject to numerous customer arbitration claims, with several resulting in substantial monetary awards:
- A $1.48 million award in 2019 related to elder abuse and unsuitable recommendations
- A $2.66 million award in 2022 for breach of fiduciary duty and failure to supervise
- Multiple six-figure awards related to unauthorized trading and unsuitable investment recommendations
Financial Advisor Complaints and Regulatory History
We are investigating financial advisors with this firm and will shortly update with specific individuals who have been or are currently subject to customer complaints and regulatory scrutiny.
Protecting Your Rights as an Investor
If you’ve lost money while investing with First Allied Securities or its financial advisors, you may have legal recourse to recover your losses. Common red flags that may indicate misconduct include:
- Unexpected losses that seem inconsistent with your risk tolerance
- Unauthorized trades in your account
- Excessive trading or churning
- Misrepresented investment risks
- Unsuitable investment recommendations
- Concentration in high-risk or complex products
Next Steps for Investors
The investment fraud attorneys at Patil Law, P.C. have extensive experience representing investors who have suffered losses due to broker-dealer misconduct. We understand the complex regulations governing the securities industry and how to hold firms accountable for their supervision failures.
If you believe you’ve been harmed by First Allied Securities or its representatives, contact Patil Law, P.C. at 800-950-6553 for a free, confidential consultation. Our attorneys will review your case, explain your rights, and help you understand your options for seeking recovery of your investment losses.
Don’t wait to take action – there are strict time limitations for filing investment fraud claims. Call 800-950-6553 today to protect your rights and start working toward recovery of your losses.
Frequently Asked Questions About Investment Loss Recovery
How do I know if I have a valid claim against First Allied Securities?
Several factors can indicate a potential claim, including:
- Losses that seem disproportionate to market conditions
- Investments that didn’t align with your stated goals and risk tolerance
- High-pressure sales tactics or misrepresented risks
- Excessive trading or unexplained fees
- Unauthorized transactions
A thorough review of your account statements and communications with your financial advisor by qualified legal counsel can help determine if you have a viable claim.
How long do I have to file a claim?
The statute of limitations for investment fraud claims varies depending on the specific circumstances and jurisdiction. Generally, FINRA arbitration claims must be filed within six years of the event giving rise to the claim. However, it’s crucial to act promptly as delay can harm your case and evidence may become harder to obtain over time.
What types of compensation can I recover?
Investors may be eligible to recover:
- Direct investment losses
- Lost opportunity costs
- Interest
- Account fees and commissions
- Attorney’s fees (in some cases)
- Punitive damages (in exceptional cases)
How much does it cost to pursue a claim?
Patil Law, P.C. typically handles investment fraud cases on a contingency fee basis, meaning we only get paid if we recover money for you. Your initial consultation is free, and we’ll explain all potential costs and fees before you decide to proceed with your case.
Will I have to go to court?
Most investment disputes are resolved through FINRA arbitration rather than court litigation. This process is generally faster and less formal than traditional court proceedings. While some cases settle before arbitration, we prepare every case as if it will go to a full hearing to ensure the strongest possible position for our clients.
What documents do I need to get started?
It’s helpful to gather:
- Account statements
- New account opening documents
- Correspondence with your financial advisor
- Trade confirmations
- Marketing materials or other documents provided by the firm However, don’t worry if you don’t have all these documents – we can help obtain necessary records during our investigation.
What if my financial advisor has moved to another firm?
You may still have a claim against First Allied Securities for losses that occurred while your advisor was employed there. Additionally, the new firm may share liability in certain circumstances. Our attorneys can help determine all potentially responsible parties.
How long does the recovery process take?
While each case is unique, FINRA arbitration typically takes 12-18 months from filing to resolution. Some cases settle more quickly, while complex cases may take longer. We work diligently to resolve claims as efficiently as possible while maximizing potential recovery.
If you have additional questions about your potential claim against First Allied Securities, contact Patil Law, P.C. at 800-950-6553 for a free consultation. Our experienced investment fraud attorneys can help evaluate your case and explain your options for pursuing recovery of your losses.
Remember: The sooner you act, the better positioned you’ll be to protect your rights and pursue recovery of your investment losses. Call 800-950-6553 today to speak with a knowledgeable investment fraud attorney.
This post is intended solely for informational purposes and does not constitute legal advice. Every case is unique and should be evaluated individually by qualified legal counsel. For more brokerage firm investigations by Patil Law, please visit the Brokerage Firm Investigations page.