UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin 34-86045, IA Release 5250 / June 6, 2019: The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative proceedings be instituted against Kimberly Pine Kitts ("Respondent"). On the basis of this Order and Respondent's Offer, the Commission finds that on June 3, 2019, a final judgment was entered by consent against Respondent, permanently enjoining her from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act, in the Civil Action Number 1:18-CV-11507, in the United States District Court for the District of Massachusetts. On November 19, 2018, Respondent pleaded guilty to one count of investment adviser fraud in violation of Title 15 United States Code, Section 80b-6, four counts of wire fraud in violation of Title 18 United States Code, Section 1343, and one count of aggravated identity theft in violation of Title 18 United States Code, Section 1028A before the United States District Court for the District of Massachusetts, in United States v. Kimberly Kitts, No. 1:18-CR-10325.

Order

Bar (Permanent)

any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

6/6/2019

participating in any offering of a penny stock

Indefinite

6/6/2019

Client alleged that rep defrauded her

$215,523.55

$232,761.77

investment adviser fraud in violation of 15 U.S.C. 80(b)

Convicted

aggravated identity theft in violation of 18 U.S.C. 1028A

Convicted

wire fraud in violation of 18 U.S.C. 1343

Convicted

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Litigation Release No. 24208, July 19, 2018: The Securities and Exchange Commission filed an enforcement action charging Kimberly Pine Kitts with defrauding multiple clients by stealing over three million dollars from their investment and retirement accounts. According to the complaint, Kitts engaged in a six-year scheme to steal 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. Kitts continued this practice until 2017 when a client questioned Kitts about the dwindling balance in her account. Through 82 unauthorized withdrawals, Kitts stole more than three million dollars from seven clients, and then tried to conceal her fraud through falsified account statements and other documentation. Kitts used the money she stole for personal expenses, including paying for vacations and several luxury vehicles. The Commission's complaint alleges that Kitts violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Judgment Rendered

Disgorgement

$2,882,221.00

Injunction

prejudgment interest. Her payment obligation is deemed satisfied by entry of the restitution order entered against her in the parallel criminal case.

FINRA

Respondent Kitts failed to respond to FINRA request for information.

letter

Bar (Permanent)

All capacities

Indefinite

3/12/2018

Pursuant to FINRA Rule 9552(h) and in accordance with FINRA's Notice of Suspension and Suspension from Association letters dated December 8, 2017, and January 2, 2018, respectively, on March 12, 2018, Kitts is barred from association with any FINRA member in any capacity. Respondent failed to request termination of her suspension within three months of the date of the Notice of Suspension; therefore, she is automatically barred from association with any FINRA member in any capacity.

ROYAL ALLIANCE ASSOCIATES INC.

Discharged

CORRESPONDENCE WAS RECEIVED FROM A CLIENT'S ATTORNEY ALLEGING A CONVERSION OR MISAPPROPRIATION OF FUNDS

THE CLIENT'S COUNSEL ALLEGED THAT THE ADVISOR CONVERTED AND/OR MISAPPROPRIATED FUNDS.

$1,969,086.67

ALLEGES THAT POOR RECOMMENDATIONS/ADVICE FROM THE REGISTERED REPRESENTATIVE CAUSED LOSSES IN ACCOUNT THAT WOULD NOT HAVE OCCURRED IF THE REPRESENTATIVE USED A DIFFERENT INVESTMENT STRATEGY.

$24,778.00

CLIENT RECEIVED A HYPOTHETICAL REPORT FROM HIS NEW ADVISOR THAT SHOWS IN HINDSIGHT HOW MUCH BETTER HIS ACCOUNT COULD HAVE PERFORMED IN 2008 AND 2009 HAD THE CLIENT'S FUNDS BEEN INVESTED USING THE NEW ADVISOR'S INVESTMENT STRATEGIES.

CUSTOMER ALLEGES THAT ANNUITY EXCHANGES WERE NOT IN THE CUSTOMER'S BEST INTEREST AND RESULTED IN A LOSS OF DEATH BENEFIT AND ACCOUNT VALUE.

$44,000.00

AFTER INVESTIGATION BY ROYAL ALLIANCE, IT WAS DETERMINED THAT THIS COMPLAINT WAS WITHOUT MERIT. THE INVESTMENTS THAT ARE THE SUBJECT OF THE COMPLAINT WERE CONSISTENT WITH THE CLIENT'S STATED GOALS AND THE CLIENT AUTHORIZED AND SIGNED NUMEROUS DISCLOSURES ACKNOWLEDGING HIS UNDERSTANDING OF THE BENEFITS, COSTS AND RISKS INVOLVED IN THESE EXCHANGES.

CUSTOMERS ALLEGE THAT MS. KITTS FAILED TO EXECUTE AN ORDER TO LIQUIDATE THEIR ACCOUNTS.

$180,000.00

AFTER A THOROUGH INVESTIGATION, THIS COMPLAINT WAS FOUND TO BE WITHOUT MERIT.