Did you suffer investment losses with Crown Capital Securities (CRD# 6312) (SEC# 801-57663, 8-17264)?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Crown Capital Securities. If you suffered losses investing with Crown Capital Securities, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
As of September 9, 2020, Crown Capital Securities’s FINRA BrokerCheck Report contains the following:
5 Regulatory Event Disclosures
2 Arbitration Disclosures
UPDATE 9/23/2020: According to FINRA’s August 2019 Disciplinary Actions: “Crown Capital Securities, L.P. (CRD #6312, Orange, California) June 20, 2019 – An AWC was issued in which the firm was censured and fined $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 failed to reasonably supervise short-term switches of Class A mutual fund shares conducted by two firm registered representatives. The findings stated that firm’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. The firm had no supervisory mechanism in place to initiate a review of mutual fund switches in the event that a representative failed to complete a mutual fund switch form or to otherwise notify the firm of a switch transaction. As a result, mutual fund switch transactions by the representatives in this matter escaped supervisory scrutiny by the firm. The firm has since updated its mutual fund switch procedures to ensure reviews for switching prior to trade approval. In addition, the firm distributed compliance bulletins to all registered representatives regarding the switching of mutual funds and mutual fund trading procedures. Furthermore, the firm voluntarily 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. (FINRA Case #2014038990602)
Main Office Location
725 TOWN & COUNTRY ROAD
ORANGE, CA 92868
725 TOWN & COUNTRY ROAD
ORANGE, CA 92868
Business Telephone Number
Crown Capital Securities’s Direct Owners and Executive Officers
DELTA CAPITAL HOLDINGS, LLC, GENERAL PARTNER
DELTA BROKER HOLDING, LLC, LIMITED PARTNER
EDWARDS, DON MICHAEL (CRD#:2669488), CFO/FINOP/CONTROLLER
FRENCH, JONATHAN LEE (CRD#:3155702), PRESIDENT/ MUNICIPAL PRINCIPAL/CROP/CMO/CCO/COO/INV. ADV.SERV.
PAULSEN, DAROL KENNETH (CRD#:358292), CEO/DIR./TREASURER/SROP
PAULSEN, PHYLLIS JEAN (CRD#:1512757), SR. VP/DIR/CAO DIR./LIC & REG/SEC
Due Diligence Requirement
FINRA requires broker-dealers to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Broker-Dealers that fail to conduct adequate due diligence on investments they recommend or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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Formerly Known As, Aliases, and Affiliates
DELTA BROKER HOLDINGS, LLC, ERIC EQUITIES, INC., DELTA BROKER HOLDINGS, LLC, ERIC EQUITIES, INC.