Crown Capital Securities to pay $75K fine imposed by FINRA

Financial Industry Regulatory Authority (FINRA) has imposed a monetary penalty Crown Capital Securities for almost $19.3 million in transaction-based compensation to unregistered entities.

A FINRA member since 1972, Crown Capital provides financial services to retail brokerages, wealth management and individuals. Headquartered in California, the firm has 300 registered representatives, and 164 offices.

The US regulator noted that Crown Capital has violated its Rules 2040 and 2010. According to FINRA, from 2017 to 2021, Crown Capital paid $19.3 million in transaction-based compensation to unregistered entities. As a result of this violation, the regulator has imposed a $75,000 fine on the financial services provider.

The penalty also includes censure and a certification signed by a principal of the firm that all of Crown Capital’s commission payment arrangements comply with FINRA Rule 2040.


FINRA stated:

Between January 2017 and January 2021, Crown Capital paid approximately $19.3 million in commissions earned by 18 of its registered representatives to 18 unregistered entities. The unregistered entities were corporations and limited liability companies created by the registered representatives to serve as doing business as names for their securities businesses and were disclosed and approved outside business activities. Crown Capital made payments to the unregistered entities instead of paying commissions directly to the registered representatives.

Crown Capital has agreed to pay the fine. The company has submitted an Election of Payment form showing the method by which it proposes to pay the fine imposed.

Earlier this month, FINRA fined Barclays $350,000 for market access controls failures.


Read Also: