Thu, December 08, 2022

FINRA Fines $75K Penalty on Crown Capital

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FINRA fined Crown Capital Securities for paying around $19.3 million in transaction-based compensation to unregistered entities.

Crown Capital, a company that has been a member of FINRA since 1972, provides a comprehensive list of financial services to clients. The firm is based in California and has about 300 registered representatives.

FINRA fined Crown Capital because they violated their rules. Crown Capital paid money to unregistered entities between January 2017 and 2021. As a result, FINRA fined them $75,000.

Crown Capital paid around $19.3 million to 18 unregistered entities from January 2017-January 2021. The unregistered entities were businesses created by the registered representatives to act as their securities business. Instead of paying commissions directly to the registered representatives, Crown Capital made these payments.

Crown Capital Securities

FINRA, the authority that imposed a recent penalty on Crown Capital, reports that the company has 164 registered branch offices. In response to the penalty, Crown Capital has agreed to pay the fine and submitted an Election of Payment form indicating how it plans to do so.

FINRA ordered that all commission and payment arrangements, including those paid in connection with any networking agreements, must comply with FINRA Rule 2040 by the certification date.

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