A federal judge has entered a final judgment against 51-year old Cape Cod hybrid advisor Kimberly Pine Kitts in an SEC case that charged Kitts, a long-time former Royal Alliance advisor, with defrauding multiple clients by stealing more than $3 million from their investment and retirement accounts.
In a parallel criminal case, Kitts pled guilty and was sentenced to 87 months in prison and ordered to pay more than $3 million in restitution.
Over a six-year period, Kitts stole funds from seven clients through 82 unauthorized withdrawals that began in 2011 until a client questioned Kitts about her account balance in 2017, according to the SEC case. Kitts tried to conceal the fraud by falsifying account statements and other documentation.
Kitts’s scheme, according to the SEC, included stealing money from client accounts by forging client signatures on withdrawal requests from variable annuities, forging client signatures to wire funds from client brokerage accounts and misleading clients into withdrawing funds to make fake tax payments.
She used the money she stole for personal expenses, including paying for vacations and several luxury vehicles, the SEC said.
Kitts was with Royal Alliance from April 2004 until November 2017, when the firm discharged her over accusations of misappropriating client funds, says Finnacial Industry Regulatory Authority’s BrokerCheck.
According to Finra's BrokerCheck, Kitts had seven disclosures on her report. One of the disclosures is a “customer dispute” dated November 7, 2017, which alleged that Kitts “converted and/or misappropriated funds.” The settlement amount listed on BrokerCheck for the disclosure is $1,969,086.67.
Finra barred Pines from acting as a broker or otherwise associating with a broker-dealer firm in March 2018.
The final judgment in the SEC's case permanently enjoins Kitts from fraud violations and orders her to pay disgorgement and prejudgment interest totaling $2,882,221. Her payment obligation is “deemed satisfied by entry of the restitution order entered against her in the parallel criminal case,” the agency said.
The SEC has also barred Kitts from associating with any broker-dealer or investment advisor and from participating in any offering of a penny stock.