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Lost Money at Centaurus Financial?

Securities Lawyer Jonathan Kurta
By: Jonathan Kurta Author

Can I Sue Centaurus Financial? Investor Complaints and Regulatory Actions

Centaurus Financial (CRD #: 30833) is an independent broker/dealer that offers securities, investment advisory services, and insurance products. According to their website, the firm serves 18,000 clients and has over 650 financial advisers at 300-plus branch office locations across the country. Its headquarters are in Anaheim, California.  

Centaurus is a dually registered broker-dealer and investment adviser.

Can I Sue Centaurus Financial?

Yes, but probably not through the usual channel of civil court. Investment contracts often feature a “pre-dispute arbitration clause” that requires investors to use FINRA arbitration to resolve their disputes. Arbitration panels perform the same function as a judge and jury. Their decisions are final and binding, making their awards difficult to appeal. Securities attorneys can help you get it right the first time.

What Fees Does Centaurus Charge?

Centaurus charges different types of fees, depending on the account type. For its brokerage accounts, Centaurus may charge the following types of fees, according to its Customer Relationship Summary:

  • Brokers earn transaction-based fees when investors buy or sell an investment. Because the firm earns more when investors trade more, they have an incentive to encourage investors to execute more transactions.
  • Bonds charge markups or markdowns, which are often included in the price of the bond. It may not always be clear how much the investor is being charged. Investors should always ask their brokers about markup and markdown fees.
  • Mutual funds, variable annuities, and alternative investments often feature additional fees. Certain investments, like variable annuities, feature a surrender charge that may come as a surprise.

Additionally, Centaurus discloses that it may charge the following fees:

  • Account maintenance fees
  • Mutual fund fees
  • Variable annuity fees
  • Product-level fees
  • Account inactivity fees
Securities Lawyer Jonathan Kurta
Written by: Jonathan Kurta

Jonathan Kurta is an accomplished securities attorney and a founding partner at Kurta Law.

A close-up view of a Wall Street street sign.

Regulatory Actions

Centaurus Financial has 24 disclosures on its record.

Below is a list of the most recent regulatory actions. You can see the full list on its detailed BrokerCheck record.

Complex Structured Product and SEC Regulatory Action

The SEC initiated cease-and-desist proceedings against Centaurus Financial, as well as Ricky Mantei and Atul Makharia. Makharia and other Centaurus brokers allegedly recommended high-risk variable interest rate structured products (VRSPs) to investors who did not have high risk tolerances – the SEC specifies that these clients were nearing retirement age and had net worths of less than $500,000. Risky investments are only suitable for high-net-worth individuals.

Ricky Maintei, as the branch manager, had a duty to supervise the other brokers under FINRA Rule 3110. FINRA Rule 3110 requires firms to have written supervisory procedures in place that are designed to ensure compliance with securities industry rules and regulations.

As a result of the allegations, Centaurus consented to a fine of $750,000. 

Read the SEC order here.

Failures to Disclose Conflicts of Interest

On June 2, 2021, Centaurus consented to the findings that it had received third-party compensation for mutual fund shares without fairly disclosing this conflict of interest to its investors. As a result of these allegations, Centaurus consented to a fine of $250,000.

There is another disclosure on its record from December 2018 alleging that Centaurus had not disclosed conflicts of interest involving certain mutual funds and cash sweep products that resulted in revenue for the firm.

What Services Does Centaurus Offer?

Centaurus offers high-risk securities, including the following:

These investments pose an especially high risk to investors and are generally only suitable for experienced, high-net-worth investors. Investors who lost money on these products without specifying a risk tolerance should consider contacting a securities attorney.

Investor Complaints

Have you worked with any of these Centaurus brokers? The following brokers are either currently registered with Centaurus or have registered with Centaurus previously. Visit the links below for information on their regulatory actions and investor disputes.

What Should I Do If I Lose Money with a Centaurus Broker?

If you specified a moderate or low-risk tolerance only to lose a significant portion of your investment with Centaurus Financial, consider reaching out to a stock fraud attorney as soon as possible. Our securities attorneys are familiar with high-risk investment products, as well as the suitability rules that govern their recommendations. Call (877) 600-0098 or email and claim your free case evaluation.