FINRA Sanctions Crown Capital Securities LP, Orange, CA
According to FINRA’s August Disciplinary report, on June 20, 2019, the regulator reportedly sanctioned Crown Capital Securities LP (CRD #6312, Orange, CA) with a censure and fine of $75,000.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a supervisory system, including WSPs, for reviewing and monitoring mutual fund switches reasonably designed to achieve compliance with FINRA suitability requirements and reportedly failed to reasonably supervise short-term switches of Class A mutual fund shares conducted by two firm registered representatives.
According to FINRA’s findings, Crown Capital’s supervisory system was not reasonably designed to supervise mutual fund switches because it relied solely upon the representative to alert the firm of a mutual fund switch.
As a result, mutual fund switch transactions by the representatives in this matter escaped supervisory scrutiny by the firm. Crown Capital has since updated its mutual fund switch procedures to ensure reviews for switching prior to trade approval and notified registered representatives about proper mutual fund trading procedures.
The firm reportedly compensated the customers who sustained losses due to the unsuitable mutual fund switches conducted by the two representatives, paying a total of approximately $395,000 in restitution.
For FINRA’s full findings, see FINRA Case #2014038990602.
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This information is publicly available on FINRA’s website and provided to you by The White Law Group. If you are concerned about investments you made with Crown Capital Securities LP the securities attorneys at The White Law Group may be able to help.
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