Jersey City Firm Agrees To Pay $250K Following Financial Scheme

JERSEY CITY, NJ — A Jersey City brokerage firm has agreed to pay $250,000 and revise its policies to resolve an investigation in connection with a financial scheme perpetrated by a agent of the firm, authorities said.

Royal Alliance Associates Inc. failed to adequately supervise Gary Basralian, misappropriated more than $1.4 million from at least three customers while overseeing a Maplewood branch office from 2009 to 2017, New Jersey Attorney General Gurbir Grewal said.

Basralian is serving a federal prison sentence related to the scheme. He admitted conducting several unauthorized wire transfers from customers' bank accounts of entities that he controlled, Grewal said. He used the money for his own expenses, including BMW payments and "tens of thousands of dollars" in credit card bills, he said.

Authorities said Basralian conducted 60 unauthorized wire transfers, Grewal said. Royal Alliance processed the transfers without review or approval by its anti-money laundering department, the state Bureau of Securities announced.

Royal Alliance paid about $5 million in restitution to Basralian's victims.

The $250,000 includes a $190,000 civil penalty, $30,000 in costs, and $30,000 that will be placed in a fund used for the bureau's investor education program.

"Royal Alliance may not have actively participated in Basralian's criminal scheme, but the firm's failure to reasonably supervise allowed it to continue for years before detection," said Christopher Gerold, chief of the Bureau of Securities. "Today we are holding that brokerage firm responsible for the role it played in failing to detect and prevent the appalling abuse of investor trust by Mr. Basralian that occurred."

Email: daniel.hubbard@patch.com