FINRA Bars Ex-Royal Alliance Rep Accused of Misappropriating Client’s Funds
The former broker at the Advisor Group-owned firm also allegedly refused to provide documents and info requested by FINRA, the self-regulating group said.
The Financial Industry Regulatory Authority has barred a former broker at the Advisor Group-owned firm Royal Alliance Associates from associating with any FINRA member firm in all capacities after he refused to provide FINRA with documents and information the industry self-regulator requested while investigating allegations he misappropriated a client’s funds, according to FINRA.
Without admitting or denying FINRA’s findings, John Henry Swon IV signed a FINRA letter of acceptance, waiver and consent on June 10 in which he consented to the imposition of the sanction against him. FINRA signed the letter Tuesday.
“As a matter of policy, we don’t comment on legal or regulatory matters, nor do we publicly discuss professionals no longer affiliated with our firm,” an Advisor Group spokesman told ThinkAdvisor on Wednesday.
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Swon became associated with Royal Alliance as a general securities representative in October 2012, according to his report on FINRA’s BrokerCheck website.
On April 16, 2021, the firm terminated Swon’s employment and filed a Form U5 termination notice alleging he “violated the firm’s policies regarding disclosure and approval of outside business activities.”
On that same date, Focus Financial (not to be confused with Focus Financial Partners) terminated Swon’s employment for the same stated reason, according to BrokerCheck. He had been serving as an advisory representative for that firm since October 2012, according to his BrokerCheck report.
On April 1, a client filed a complaint alleging that Swon “misappropriated or otherwise mismanaged funds entrusted to him” as an investment advisory rep of Focus Financial. The client requested damages of $110,000 and that dispute is still pending, according to BrokerCheck.
Focus Financial did not immediately respond to a request for comment on Wednesday.
In May 2021, Swon violated FINRA Rules 8210 (governing the provision of information and testimony and inspection and copying of books) and 2010 (governing standards of commercial honor and principles of trade) by failing to provide information and documents requested by FINRA in connection with FINRA Enforcement’s investigation concerning allegations in the client complaint that he misappropriated funds, according to FINRA.
Not providing documents and other information requested by FINRA is typically a surefire way to be barred.
Swon notified FINRA staff that he would not produce the requested information and documents or otherwise cooperate, FINRA alleged.
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