Advisor stole $3M from clients, used funds for vacations, says SEC

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The SEC has charged a barred independent advisor with defrauding multiple clients by stealing over $3 million from their investment and retirement accounts, according to the regulator's complaint filed in federal court.

Kimberly Pine Kitts, 51, misappropriated client funds by forging their signatures on withdrawal requests from variable annuities and to wire funds from client brokerage accounts, the regulator claims. She also misled clients into withdrawing funds to make what they thought were tax payments but instead were secretly directed into her own personal account, according to the SEC.
Her six-year scheme was derailed in 2017 when a client questioned Kitts about the dwindling balance in her account, the SEC says.

Kitts worked for Royal Alliance Associates in Palmer, Massachusetts, doing business as Marquis Consulting, an entity she created and wholly controlled. She is a resident of Orleans, Massachusetts, on Cape Cod.

Kitts could not be reached by phone as the number listed for Marquis Consulting was not in service. She did not return an email.

In the complaint, the SEC accuses Kitts of stealing funds from seven clients through 82 unauthorized withdrawals beginning in 2011. She allegedly misappropriated clients’ variable annuity and brokerage account funds and misled one client to transfer $200,000 from her IRA to a managed account she shared with another client purportedly to pay some taxes. She tricked the woman into signing signature pages for the IRA distributions, concealing the fact that the funds were directed to Kitts’ Marquis account, the SEC alleges.

Kitts used the money for personal expenses, including paying for vacations and several luxury vehicles, the regulator says. She attempted to conceal her fraud through falsified account statements and other documentation, according to the SEC.

Kitts worked for Royal Alliance from April 2004 to November 2017, when she was discharged after an unnamed client’s attorney accused her of misappropriating client funds, FINRA BrokerCheck records show. She was barred by FINRA in March for failing to respond to the regulator's requests for information.

The SEC is seeking a permanent injunction restraining Kitts from violating federal laws and disgorgement of allegedly ill-gotten gains plus prejudgment interest as well as civil penalties.

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Enforcement SEC enforcement Embezzling Financial crimes SEC Royal Alliance Associates