Broker Investigation: Broker Eric S. Smith Barred, CCCS Brokerage Services, Inc. Suspended

On January 2nd, a FINRA regulatory decision handed down a suspension and fines for broker-dealer CSSC Brokerage Service, Inc. (“CSSC”). The decision also barred Eric S. Smith (CRD#:2894648), CEO of the parent corporation, from associating with any FINRA member firms in any capacity. Smith and CSSC engaged in fraudulent activity in the sales of securities to prospective investors.

According to the hearing panel decision, Smith and CSSC “…knowingly made misrepresentations and omissions of material facts in connection with the sales of securities…” Not only is this unethical firm customers, it is a violation of FINRA rules.

Mr. Smith, the majority owner of the firm and CEO of the parent company, also engaged in direct management of CSSC’s business affairs without being properly registered as a principal agent of the company. FINRA found more than one problem with the actions of Smith in regards to his actions related to firm management. By paying CSSC’s expenses, hiring representatives and managers, and supervising certain representatives, Smith “exercised control and management” of CSSC thus acting in the role of principal broker-dealer. This is a role reserved only for registered agents.

In addition to barring Smith, FINRA suspended CSSC for one year and imposed penalty sanctions of $120,000. And both Smith and CSSC will pay around $12,000 for the cost of the proceedings

Investment firms and all their employees, including supervisors, have a responsibility to act ethically. Disciplinary actions such as these are a reminder that supervisors are not shielded from liability, even if they remain unregistered.

Contact Our Investment Fraud Lawyers

If you have lost money due to a broker or investment firm’s negligence, you have been a victim of fraud and have a legal right to seek compensation. At Sonn Law Group, our dedicated team has extensive experience seeking justice on behalf of our clients. Contact us today for a free case review.

Disclaimer: This article contains opinions and NOT statements of fact in any way whatsoever. The information here is general information that should not be taken as legal advice. NO attorney-client relationship is established between you and our attorneys by reading this article. This article is attorney advertising and should not be used as a substitute for legal advice from a qualified lawyer.

Rate this post:

1 Star2 Stars3 Stars4 Stars5 Stars
(No Ratings Yet)
Loading...