Osaic Services

Osaic Services’ ecords reveal a history of allegations of misconduct.

Investors should review Osaic’s regulatory actions under its previous names: SagePoint, Woodbury Financial Services, Triad Advisors, Securities America, and Royal Alliance, to name a few.

Osaic Services (CRD #: 133763), formerly known as Advisor Group, has numerous regulatory actions on its records that brokers should review. Kurta Law wants to know if you have concerns about your Osaic investment portfolio. Our securities attorneys win awards for securities fraud on behalf of investors.

Osaic Services: Previous Names

A number of brokerage firms recently re-branded as Osaic, including the following:

• SagePoint
• Triad Advisors
• Woodbury Financial Services
• Royal Alliance
• FSC Securities
• Securities America

These firms all have regulatory records that merit serious scrutiny by investors.

Investors should know that the following investment products offered at Osaic can be risky and/or come with considerable fees.

• Variable Annuities
• Variable Life Insurance
• Unit Investment Trusts (UITs)
• Mutual funds
• Exchange-traded funds (ETFs)
• Alternative Investment Products

Recent Regulatory Actions

These are the most recent regulatory actions on Osaic’s record. Kurta Law wants investors to know about these allegations of misconduct, which were filed against firms before they became Osaic.

If you want to read the complete list of regulatory actions, see the firm’s detailed BrokerCheck record.

SEC Fine for Alleged Violation of Custody Rule

On September 28, 2023, the Securities and Exchange Commission (SEC) alleged that SagePoint Financial, FSC Securities Corporation, Royal Alliance Associates, and Woodbury Financial Services failed to obtain verification by an independent public accountant of client funds and securities of which it had custody. The SEC alleged the firms failed to obtain verification by actual examination of the client funds and securities. The firms therefore allegedly violated the SEC’s “Custody Rule.”

The SEC fined each firm $100,000.

California Department of Insurance $6,000 Fine

On December 27, 2022, The California Department of Insurance alleged that after reviewing Osaic’s history of regulatory disciplinary action that it would be against the public’s interest to permit the firm to continue transacting insurance in the state of California.

The firm settled with California for $6,000.

Securities America, Royal Alliance, and SagePoint Allegedly Failed to Ensure All Eligible Customers Received 529 Plan Sales Charge Waivers

On January 24, 2023, three firms entered into an Acceptance, Waiver and Consent agreement (AWC) with FINRA in order to settle allegations regarding 529 plans and sales charge waivers.

529 plans are tax-advantaged municipal securities designed to encourage saving for educational expenses. The firms below allegedly failed to train brokers to identify applicable Class A sales charge waivers or Class AR shares that could have saved investors’ money.

• Securities America allegedly caused customers to pay approximately $120,000 in unnecessary sales charges and fees.
• Royal Alliance: $235,000 in unnecessary sales charges and fees.
• SagePoint: $160,000 in unnecessary sales charges and fees.

As part of the terms of the AWC, the firms consented to the following fees:

• Securities America consented to pay restitution of $122,845.59, plus interest.
• Royal Alliance consented to pay restitution of $234,831.92, plus interest.
• SagePoint consented to pay $156,903.93, plus interest.

FSC Securities Corporation, RoyalAlliance Associates, SagePoint Financial, and Woodbury Financial Services Consent to Fines Following GPB Capital Allegations

On November 30, 2022, four firms entered into an AWC that consented to the findings that their representatives failed to provide material information when making recommendations of GPB Capital.

On April 27, 2018, GPC Capital allegedly informed the firm that stated GPC was in the process of registering securities issued by limited partnership Automotive Portfolio, and that Automotive Portfolio had delayed its submission of audited financial statements pending a forensic audit.

Allegedly, the firms did not update the offering documents to inform customers that the partnership would be delayed in filing its audited financial statements. The firms allegedly continued to sell shares of GPB Capital while failing to disclose this material information.

Terms of the AWC

• FSC Securities consented to a $50,000 fine and partial restitution of $277,612.30 plus interest.
• Royal Alliance consented to a $35,000 fine and partial restitution of $171,500 plus interest.
• SagePoint Financial consented to a $60,000 fine and a partial restitution of $325,475.66.
• Woodbury Financial consented to a $55,000 fine and a partial restitution of $300,224.98.

Unsuitable Margin Account Allegations

According to an AWC dated September 9, 2022, SagePoint failed to supervise customer accounts, allegedly resulting in unsuitable margin trading for two customers.

• “Unsuitable” investments are investments that do not suit an investor’s risk tolerance, along with other key investor characteristics.
• Margin accounts are often unsuitable because they purchase securities with borrowed money, amplifying the risk for losses. They also have minimum account requirements, which puts the investor at risk for a margin call, which is a call from a broker requesting that the customer deposit more money in the account or risk having other securities liquidated to meet the account minimum.

As a result of the unsuitable margin recommendations, one customer allegedly ended up paying $32,041.99 in margin interest and $4,869.50 in commissions and fees. Another broker with allegedly unsuitable margin trades allegedly paid $8,863.69 in margin interest and $6,054.97 in commissions and fees.

SagePoint consented to a $35,000 fine and a restitution payment of $51,830.24 plus interest.

Fees and Conflicts of Interest

Kurta Law wants investors to be aware of the following fees and conflicts of interest that Osaic discloses in its Customer Relationship Summary (Form CRS).

• Securities transactions come with per-transaction commissions. These commissions create an incentive for brokers to encourage you to trade more often.
• Each securities transaction also comes with a transaction fee and a ticket charge.
• Clearing or custodial charges.
• Certain products share revenue with Osaic. These products create an incentive to recommend these products over others.

Please note that these are fees associated with brokerage accounts. Osaic also offers advisory accounts, which charge fees based on the total amount of assets under management. Make sure you understand what type of account you have and any associated fees.

Kurta Law Can Help

Kurta Law attorneys are experts in FINRA arbitration, the process that most investors must use to hold brokerage firms accountable for unfair losses. The Financial Services Industry Regulatory Authority (FINRA) regulates the securities industry and establishes rules and regulations that brokerage firms and their representatives must follow. If your brokerage firm or broker violated one of these rules, our attorneys can skillfully present your case to a FINRA arbitration panel.

Kurta Law offers free case evaluations. Contact us today if you would like us to review your case. Call (877) 600-0098 or email info@kurtalawfirm.com.