Crown Capital Securities

Kurta Law is investigating recommendations by Crown Capital Securities brokers. If you have concerns about unexpected losses in your account. Broker misconduct can result in losses that go beyond the ordinary fluctuations that investors can expect in their investment portfolios.

Background Information

Crown Capital Securities (CRD #: 6312) is registered as both a brokerage firm and an investment advisory firm. Make sure you sign up for the type of account that makes more sense for you. Keep in mind that different types of accounts come with different types of fees and different conflicts of interest. Ask your brokerage firm which type of service is right for you.

Brokerage Firm Services

• Retirement planning
• Buying and selling securities
• Estate planning
• College financial planning

Advisory Services

• Financial planning services
• Portfolio management services
• Advisor referral services

You may have done business with Crown Capital Securities under one of the following names:

• Eric Equities Inc.
• Delta Broker Holdings

This brokerage firm has its main address in New Jersey.

Brokerage Firm Fees and Conflicts of Interest

Ask your Crown Capital representative about their conflicts of interest before you invest. You can read more about the firm’s conflict of interest in the Customer Relationship Summary.

• Transaction fees: The firm collects a fee for every transaction executed in your account, which creates an incentive for brokers to encourage you to trade more often.
• Revenue Sharing: Crown offers mutual funds that come with revenue-sharing agreements for the firm. These payments are often deducted from the fund’s total assets and therefore impact the fund’s investment return or interest payments.
• Crown Capital has introducing arrangements with Pershing. The firm receives transition credit payments from Pershing for accounts referred to the Pershing clearing platform. This creates an incentive to encourage advisors to open accounts at Pershing rather than another custodian.
• Certain products offer Crown Capital representatives compensation in the form of business entertainment, small gifts, and financial assistance in covering the cost of marketing and sales events. These

Regulatory Actions

Crown Capital Securities has eleven disclosures on its detailed BrokerCheck record. Kurta Law wants investors to take special note of the following regulatory actions and fines.

$295,000 Fine for SEC Allegations

Because Crown Capital is registered as both a broker-dealer and an investment advisory firm, it is regulated by two regulatory bodies: FINRA and the SEC. FINRA regulations broker-dealers and the SEC regulates investment advisory firms. On June 24, 2021, the SEC alleged that the firm failed to fairly and fully disclose its conflicts of interest, as required by the Securities Exchange Act and the Investment Advisers Act.

According to the SEC, Crown Capital representatives recommended mutual funds and cash sweep products that paid the firm and its representatives without disclosing these payments to customers. Failing to disclose this information is a breach of the investment advisory firm’s fiduciary duty to its customers.

Fiduciary Duties

A fiduciary duty is a duty to work in a client’s best interest. Investment advisory firms and their representatives are considered fiduciaries.

Terms of the AWC

The SEC censured the firm and imposed a fine of $295,000. The firm also agreed to pay a disgorgement fee to customers of $1,138,740.02.

FINRA Fine of $395,000 for Alleged Mutual Fund Switches

According to allegations filed on June 20, 2019, Crown Capital Securities had supervisory failures related to recommended mutual fund switches. Mutual fund switches can result in new sales charges, with no clear benefit for the investor. For this reason, Crown Capital Securities required its representatives to review mutual fund switches. However, FINRA alleged in an Acceptance, Waiver, and Consent Agreement (AWC) that Crown Capital relied on firm representatives to alert the firm to switches. AWCs allow investors to settle with their brokerage firms without admitting or denying the findings.

This allegedly allowed two representatives to recommend mutual fund switches that resulted in unnecessary sales charges for customers. According to the AWC, Crown Capital customers ended up paying $395,000 in unnecessary sales charges.

Failure to Supervise 3110

FINRA Rule 3110 requires that firms establish systems of supervision to maintain their compliance with securities regulations. This includes appointing supervisors and providing them with Written Supervisory Procedures (WSPs).

Terms of the AWC

In addition to the $395,000 restitution payment to customers, Crown Capital also agreed to pay a fine of $75,000.

Allegations Filed Against Crown Capital Securities Brokers

Kurta Law is aware of numerous allegations filed against Crown Capital brokers. The following is only a selection of investor disputes.

• A broker who was most recently registered with Crown Capital was suspended by FINRA following allegations of private securities transactions. He also has eleven investor disputes on his record.
• Another broker allegedly recommended unsuitable alternative investments in a six-figure dispute.
• This dispute features similar allegations.
• This Crown Securities broker also allegedly recommended an unsuitable alternative investment. The dispute was settled for six figures.

If you have concerns regarding your investments with a Crown Capital broker, contact a securities attorney today.

Kurta Law Can Help

If you lost money working with a Crown Capital Securities broker, contact a Kurta Law securities attorney today. Our attorneys are experts in FINRA arbitration, which is the process that most investors are required to use instead of suing in civil court. Kurta Law securities lawyers offer free case evaluations and do not collect a fee unless we win your case. Contact (877) 600-0098 or email info@kurtalawfirm.com.