Florida Brokerage Firm Suspended from Securities Industry for Failure to Pay Arbitration Award
Crystal Bay Securities Inc. (CRD #142339) is a previously registered brokerage firm. Based in Delray Beach, Florida, Crystal Bay Securities was originally formed in 2006 and was licensed to operate in several U.S. states.
In February of 2019, the Financial Industry Regulatory Authority (FINRA) cancelled this broker-dealer’s securities license after it failed to pay an arbitration award before the deadline. Here, our experienced Miami investment fraud attorneys review the allegations of misconduct involving Crystal Bay Securities.
Crystal Bay Securities: Losses in Unsuitable Real Estate Investment Trusts (REITs)
In December of 2018, a FINRA arbitration panel based in Boca Raton, Florida entered an arbitration award against Crystal Bay Securities (FINRA Arbitration Case #18-00218). After sustaining significant investment losses, a former customer of the firm filed a complaint against this brokerage firm. Among other things, this investor asserted that Crystal Bay Securities:
- Breached its fiduciary duty;
- Exploited a vulnerable adult;
- Exploited a disabled adult;
- Violated Florida state securities laws; and
- Failed to supervise a financial advisor.
The underlying cause of action in this case related to the purchase of Real Estate Investment Trusts (REITs), which the investor alleges were unsuitable for her individual profile and long-term financial objectives. In total, there were four different REITs that were implicated in this proceeding. Upon reviewing all available evidence presented by the parties, the South Florida-based FINRA arbitration panel awarded $136,201.82 in statutory damages to the investor as well as additional financial compensation for court costs and legal fees.
FINRA Sanctions: Failure to Pay Arbitration Award
Registered financial advisors and licensed brokerage firms have a legal obligation to comply with the decisions made by FINRA arbitration panels. The integrity of the dispute resolution process relies on respondents abiding by the rulings made by these panels. There are swift sanctions from firms that do not comply. Under FINRA Rule 9554, brokerage firms must pay a FINRA arbitration award in full, or file an official appeal of a decision, within 30 days of the date that the award was announced by the panel. The failure to do so can lead to an expedited suspension.
According to FINRA’s BrokerCheck tool, Crystal Bay Securities failed to pay this arbitration award within 30 days. As a result, the regulator has cancelled the firm’s license to sell securities. While there are some defenses that broker-dealers can raise when facing a license suspension under FINRA Rule 9554, none of them were raised or were deemed applicable to this case. As of February of 2019, Crystal Bay Securities is no longer licensed to operate in the industry.
Speak to Our Miami FINRA Arbitration Lawyers Today
At Carlson & Associates, P.A., we hold negligent financial advisors and brokerage firms accountable for their wrongdoing. If you sustained significant investment losses as a result of any type of broker misconduct, please do not hesitate to call us today for a confidential case evaluation. We represent investors in Miami, in Miami-Dade County, and throughout the state of Florida.
Resources:
brokercheck.finra.org/firm/summary/142339
finra.org/sites/default/files/aao_documents/18-00218.pdf