Crown Capital Securities, a midsize broker-dealer with 350 financial advisers, last month settled with the Securities and Exchange Commission due to sales of high-fee mutual funds, agreeing to pay a $1.58 million penalty.
InvestmentNews in June reported about Crown Capital's pending settlement with the SEC over the issue; the firm had revealed in a filing with the SEC that it was preparing for a $1.38 million penalty.
Without admitting or denying the SEC's findings, Crown Capital is to pay disgorgement of $1.14 million, interest of $154,000, and a penalty of $295,000.
Darol Paulsen, CEO and owner of Crown Capital Securities, did not return a call Thursday to comment. The firm is based in Orange, California.
The SEC's order, dated June 24, found that that Crown Capital provided inadequate disclosures regarding its receipt of 12b-1 fees from client investments, according to the SEC. And although the firm was eligible to self-report to the SEC as part of an SEC initiative about share class disclosure, it did not do so.
The SEC launched its Share Class Selection Disclosure Initiative in February 2018 to target advisory firms that recommended high-fee mutual funds — those that charged 12b-1 fees kept by the firms — without telling clients that less expensive share classes were available in the same funds.
Most firms place a limit on advisors’ sales of alternative investments to clients in the neighborhood of 10% a customer’s net worth.
Those jumping ship include women advisors and breakaways.
Firms in New York and Arizona are the latest additions to the mega-RIA.
The agent, Todd Bernstein, 67, has been charged with four counts of insurance fraud linked to allegedly switching clients from one set of annuities to another.
“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half billion-dollar award to the State,” Justice Peter Moulton wrote, while Trump will face limits in his ability to do business in New York.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
