The White Law Group is investigating potential securities claims involving Centaurus Financial, Inc. (CRD#: 30833, Anaheim, CA).
Centaurus Financial, LLC, headquartered in Anaheim, CA, is a national financial advisory firm. The firm reportedly has 21 disclosure events on its broker record including 13 regulatory events and 8 arbitrations.
Broker Misconduct and Customer Complaints
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
There have been several cases of registered representatives employed by Centaurus Financial who were allegedly involved in broker misconduct and fraudulent activities.
September 2020 – FINRA Reportedly Bars Centaurus advisor Tony Kassaei after he allegedly participated in undisclosed and unapproved private securities transactions through which individuals, most of whom were customers of his member firm, invested at least $2.6 million in real-estate businesses.
FINRA’s findings stated that the owner of the real-estate businesses had allegedly previously worked with Kassaei at the firm. The firm reportedly had not approved Kassaei’s participation in these security sales, they were not recorded on the firm’s books and records, and Kassaei purportedly acted outside the regular course and scope of his employment with the firm when participating in the securities transactions.
According to FINRA, the owner pled guilty to wire fraud, reportedly admitting that he had engaged in a real-estate Ponzi scheme that caused approximately $12 million in investor losses. The individuals in whose investments Kassaei participated purportedly lost at least $1.3 million.
The owner reportedly paid Kassaei substantial sums, including at least $125,000 while he facilitated securities transactions between the owner and these individuals. In addition, in response to a specific inquiry by the firm, Kassaei allegedly claimed that he had not participated in a customer’s private securities transactions totaling $500,000.
October 2018 – Former Centaurus advisor Larry J. Templin was reportedly barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) in October 2018 after alleged bank fraud charges came to light.
According to FINRA’s Letter of Acceptance, Waiver & Consent, Templin allegedly refused to provide information requested by FINRA in its investigation which began after receiving his former member firm’s Uniform Termination Notice for Securities Industry Registration (Form U5) that alleged bank fraud.
Temple’s FINRA BrokerCheck report indicates that he was a registered representative with Centaurus Financial Inc. in Temple, Texas from September 2006 through June 2018 when he was reportedly dismissed for “alleged bank fraud”.
FINRA Censures and Fines Centaurus Financial
Centaurus Financial has also reportedly had issues with regulators.
August 2016 – Centaurus was censured, fined $100,000 and required to pay $85,281.62 in restitution to customers after it allegedly failed to identify and apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs), resulting in customers paying excessive sales charges of approximately $85,281.62. The findings stated that the firm failed to establish, maintain, and enforce a supervisory system and WSPs reasonably designed to ensure customers received sales charge discounts on all eligible UIT purchases. The firm relied primarily on its registered representatives to apply appropriate UIT sales charge discounts to customer purchases, but did not ensure that the sales charge discounts were identified and calculated accurately. (FINRA Case #201404167660)
April 2009 – FINRA fined Centaurus Financial, Inc. $175,000 for its alleged failure to protect certain confidential customer information. Centaurus was also ordered to provide notifications to affected customers and their brokers and to offer these customers one year of credit monitoring at no cost.
FINRA found that from April 2006 to July 2007, the firm failed to ensure that it safeguarded confidential customer information. Its improperly configured computer firewall – along with an ineffective username and password on its computer facsimile server – permitted unauthorized persons to access stored images of faxes that included confidential customer information, such as social security numbers, account numbers, dates of birth and other sensitive, personal and confidential data. The firm’s failures also permitted an unknown individual to conduct a “phishing” scam. When CFI became aware of the phishing scam, the firm conducted an inadequate investigation and sent a misleading notification letter to approximately 1,400 affected customers and their brokers.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Centaurus Financial and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.