SEC Charges Broker-Dealer Alpine Securities Corporation and Two Employees with Engaging in Unauthorized Securities Transactions
On August 10, 2022, the Securities and Exchange Commission (the “SEC”) charged broker-dealer Alpine Securities Corporation, its former Chief Executive Officer Christopher Doubek, and its current Chief Operations Officer Joseph Walsh with engaging in a series of unauthorized securities transactions.
According to the SEC’s complaint, filed in federal district court in Nevada, in May and June 2019, Alpine engaged in improper conduct in an attempt to force hundreds of retail customers to close their accounts. Specifically, Doubek and Walsh allegedly caused Alpine to sell approximately $268,000 in customer securities without notice or customer approval on the basis that Alpine deemed the securities “worthless.”
The complaint further alleges that without authorization, and contrary to how the term is defined in its customer agreements, Doubek and Walsh caused Alpine to declare 545 customer accounts “abandoned” and to transfer approximately $54 million worth of securities out of these “abandoned” accounts and into accounts that Alpine controlled.
Alpine was already in hot water with the Financial Industry Regulatory Authority (“FINRA”) for abusing its customers. On March 24, 2022, the FINRA extended hearing panel expelled Alpine Securities Corp from FINRA membership and ordered the firm to pay more than $2.3 million in restitution to customers for converting and misusing customer funds and securities, engaging in unauthorized trading, charging customers unfair prices in securities transactions and unreasonable fees, and making an unauthorized capital withdrawal. Alpine announced it would fight the decision, but the current status of that appeal is unclear.
According to details on Doubek’s FINRA broker check profile, Doubek’s issues go well beyond the charges in the SEC Complaint. Alpine discharged Doubek on June 25, 2021, after an internal investigation done by Alpine determined that Doubek colluded with a customer to misappropriate in excess of $1.3 million in firm funds and authorized a direct payment to himself of more than $130,000 without authorization and for no proper business purpose. He also engaged in systemic failure to address regulatory requests, failed to properly review transactions prior to permitting securities to be sold, hired and paid an individual with no known qualifications for a sales and trading position and advised her not to disclose to FINRA via Form U4 a criminal conviction, and paid consultant fees to another individual with whom he had a relationship without any documentation of the services provided.
Joseph Walsh is currently still employed by Alpine and has no other past disciplinary history.
Alpine eventually returned these securities to its customers, but not until it received numerous customer complaints and inquiries from FINRA.
The SEC’s complaint charges Alpine, Doubek, and Walsh with violating the antifraud provisions of Sections 10(b) and 15(c)(1)(A) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, as well as Section 17(a)(1) of the Securities Act of 1933, and seeks injunctive relief, a penny stock bar, and civil penalties against them.
To speak with a Securities Attorney, please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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Boca Raton, Florida 33432
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