Centaurus Financial investigation into Structured CDs
The securities attorneys at The Law Office of David Liebrader have opened an investigation into the securities related conduct of Centaurus Financial a registered FINRA broker dealer based in Anaheim, California.
The pending customer disputes that gives rise to the investigation concern a number of high risk Structured CDs that Centaurus’ registered representatives sold to the firms’ clients. According to Investment News, an industry publication, the State of Colorado filed a notice of charges through its Securities Commissioner alleging that Centaurus and two of its brokers have been the subject of a large number of customer complaints involving structured CDs.
Structured CDs are unlike traditional bank issued and insured certificates of deposit in that their returns are tied to a stock or commodity index, and they often apply a “teaser” interest rate in the first year which vanishes in subsequent years. Structured CDs are also illiquid, and typically long term. Clients looking to redeem the CD prior to the maturity date often face substantial losses.
The notice of charges filed by the Colorado Securities Commissioner seeks to determine whether Centaurus Financial adequately supervised the brokers who sold the structured CDs to the firm’s clients.
Structured CDs are considered to be alternative or non-conventional investments, which FINRA recognizes are complex, difficult to understand investments. Accordingly, FINRA requires broker dealers that sell them to perform a due diligence investigation into the underlying product to determine whether it is adequately structured,, then perform a customer specific suitability analysis to make sure the product is appropriate for the specific client’s needs and objectives. The firm is also required to train its representatives on the product, including its risks, benefits costs and features.
Structured CDs and alternative investments entail significant risk, and are not suitable for all investors. In addition, it is not unusual to see fees of over 12-15% coming off the top, meaning that for every dollar invested, only 85 cents goes towards the investment.
Centaurus Financial registration and disciplinary history
In order to lawfully sell investments to the public, a broker dealer must be registered. FINRA maintains a database that the public can access to check the credentials of firms and their financial advisors. The website, also known as broker check has a listing for Centaurus Financial, which has been the subject of eight customer complaints and twelve regulatory investigations.
If you are the victim of investment fraud, or have lost money by investing in alternative investments please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation to discuss your legal rights and options. Our firm takes cases on a straight contingency fee, with no money up front, and no money owed unless there is a recovery.
There is no charge for the initial consultation, so call (702) 380-3131 today to speak with an experienced securities attorney who will fight to recover your losses.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.