Miami-Based Brokerage Firm Cited for Securities Law Violations
Creand Securities (CRD#: 38964/SEC#: 8-48481) is a brokerage firm based in Miami, Florida. The firm is licensed to operate in 14 states and territories. In May of 2024, the Financial Industry Regulatory Authority (FINRA) took disciplinary action against Creand Securities (Case No. 2020065127101). The broker-dealer was cited for violating customer reserve requirements. Here, our Miami financial advisor negligence attorney discusses the FINRA enforcement action in more detail.
Brokerage Firm Violations: Creand Securities of Miami, Florida
FINRA launched an investigation into the practices of Creand Securities after learning of potential securities industry violations. According to findings from the regulatory agency, Creand Securities violated securities industry rules between October of 2019 and February of 2020. Specifically, FINRA determined that Creand Securities incorrectly calculated its customer reserve requirement on five different occasions.
The error resulted in the firm not setting aside enough funds to protect customer assets and, as a consequence, resulted in reserve shortages between $1.3 million and $13.4 million. The total deficiency was $27.8 million. Further, Creand Securities submitted five inaccurate financial reports and maintained incorrect records. These actions violated several regulations, including the Securities Exchange Act of 1934 and FINRA rules. These regulations are vital to protect investors. They help to ensure that broker-dealer insolvency does not undermine investor funds.
Understanding the “Customer Protection Rule” in Securities Law
FINRA determined that Miami-based Creand Securities violated the “Customer Protection Rule”—or as it is officially known as Rule 15c3-3 under the Securities Exchange Act of 1934. The regulation plays a vital role in protecting client assets held by broker-dealers. Its primary purpose is to prevent the misuse of customer funds and securities by ensuring that these assets are promptly available in the event of a broker-dealer’s financial failure. The rule mandates that broker-dealers must keep customer funds in specially protected accounts separate from the firm’s own funds.
Beyond that, the rule requires that the amount of money in these protected accounts is regularly calculated based on a specific formula that takes into account the liabilities owed to customers versus the credits they hold. It is a protective measure that allows customers to feel secure in the knowledge that their investments are well-guarded. Should a broker-dealer face insolvency, the rule ensures that customers’ assets can be returned without unnecessary delay.
Creand Securities Censured and Fined By FINRA
FINRA took enforcement action against Creand Securities. Without admitting or denying any of the specific allegations raised, the brokerage firm consented to the organizations proposed penalties. More specifically, the Miami-based broker-dealer agreed to:
- Accept a public censure;
- Pay a $115,000 fine;
- Remediate the issues within 90 days; and
- Develop a comprehensive supervisory system.
Consult With a Top-Tier Investor Rights Attorney in Miami, FL Today
At Carlson & Associates, P.A., our Miami investor rights lawyer is committed to putting the rights and interests of clients first. If you have any questions about your legal rights or your legal options, please do not hesitate to contact our legal team today. Our firm represents investors in Miami and across Florida.
Source:
brokercheck.finra.org/firm/summary/38964