FINRA Fines Crown Capital $75,000 for Compliance Failures

The Financial Industry Regulatory Authority (FINRA) has filed and settled enforcement actions against Crown Capital Securities.

Crown Capital Securities, L.P. has been a FINRA member since 1972. The firm provides financial services to customers, including retail brokerage and wealth management to individuals. The firm is headquartered in Orange, California, has approximately 300 registered representatives, and 164 registered branch offices.

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 consented to a censure and a fine of $75,000. And FINRA mentioned that it will not bring any future actions against the respondent alleging violations based on the same factual findings.