Cheryl Kitashima Allegedly Recommended Unsuitable Investments

Cheryl Kitashima (CRD #: 729389), a broker registered with Centaurus Financial, is the subject of an investor dispute. This is according to her BrokerCheck record, accessed on February 23, 2024. Keep reading for more details. 

Investor Allegations 

On November 27, 2023, an investor alleged that Cheryl Kitashima recommended an unsuitable, high-risk, speculative, and illiquid investment. The investor further alleged that she breached her fiduciary duty. The investor is seeking $50,000. 

Settled Investor Disputes 

Four other disputes on Cheryl Kitashima’s record allege she recommended unsuitable investments. These collectively settled for approximately $300,000. 

FINRA Rule 2111 

FINRA Rule 2111 requires brokers to evaluate whether an investment fits their investor’s financial goals.

Some common violations of this rule include:

• Excessive trading, which violates the need for quantitative suitability. This means that the number of trades must suit an investor’s goals. Excessive trading is also known as “churning.” 
• Recommendations of unsuitable investment strategies. For instance, overconcentration of securities in a certain stock or sector is typically unsuitable due to the degree of risk.
• Recommendations of high-risk or illiquid investments. These investments may lead to high fees for the investor.

Investors who rely on brokers for recommendations may be able to recover their losses by pursuing FINRA arbitration.

Fiduciary Duties

Brokers are often dually registered as Registered Investment Advisers (RIAs) with the SEC. RIAs are fiduciaries, and fiduciaries are required to act in their clients’ best interests. Brokers are not fiduciaries but must abide by FINRA Rule 2111 and Regulation Best Interest. (To learn more about the differences between brokers and Registered Investment Advisers, click here.) 

Background Information 

Cheryl Kitashima has passed the following exams: 

• Series 63 Uniform Securities Agent State Law Examination 
• SIE – Securities Industry Essentials Examination 
• Series 7 General Securities Representative Examination
• Series 22 Direct Participation Programs Representative Examination 
• Series 6 Investment Company Products / Variable Contracts Representative Examination 

She is a registered broker in eight states and is an investment adviser in six states. 

During her 42 years of experience, Cheryl Kitashima has registered with seven firms: 

• Centaurus Financial (CRD #: 30833) 
• KMS Financial Services (CRD #: 3866) 
• Pacific Harbor Securities (CRD #: 8755) 
• Royal Alliance Associates (CRD #: 23131)
• Integrated Resources Equity Corporation (CRD #: 6403) 
• FSC Securities Corporation (CRD #: 7461) 
• Waddell & Reed (CRD #: 866) 

Kurta Law Can Help 

If you have worked with Cheryl Kitashima and have concerns about your investments, do not hesitate to contact us at 877-600-0098 or info@kurtalawfirm.com for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf. Do not let securities fraud go unchecked. Start your recovery process today.