Centaurus Financial

Katherine Nishnic Has Investor Complaints Over Structured Note Products

December 24, 2019 | by Staff Attorney

According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Katherine Nishnic (Nishnic), currently associated with Centaurus Financial, Inc. (Centaurus), has been subject to at least eight customer complaints during her career. The majority of the customer complaints against Nishnic concern allegations relating to unsuitable recommendations in structured products. The law offices of Gana Weinstein LLP are currently representing investors, including Centaurus investors, who were surprised to find out that the “bonds” that were recommended by their advisors have almost completely stopped paying interest while plummeting in value.

What many investors in this situation did not realize was that they were not sold bonds at all but instead complex structured products that go by a variety of names including steepener notes, adjustable rate market notes, spread linked notes, or structured notes. Regulators have already stated that it is improper to sell these investments as a fixed income substitute or to compare them to bonds in terms of producing a revenue stream. However, in our firm’s experience it appears that many brokers have been selling structured products as bond alternatives.

Structured products range in risk from benign to extreme. However, most structured products produce inferior risk/return profiles than ordinary debt or equity instruments because the brokerage firms that issue these products seek to profit from the spread between the payment to investors and the amount of money the brokerage firm can make from the issuance. When dealing with complex structured products most investors will lack the ability to understand the merits of investments nor are they appropriate for investors seeking a fixed or reliable income and have a desire for preservation of capital.

Centaurus Financial Broker David Crane Subject to Multiple Tax Liens

September 29, 2019 | by Staff Attorney

The law offices of Gana Weinstein LLP is reporting on public disclosures on advisor David Crane (Crane), currently registered with Centaurus Financial, Inc. (Centaurus Financial) out of Dacula, Georgia. According to a BrokerCheck report, Crane has been subject to at least one customer dispute. In addition, Crane disclosed five tax liens during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Crane’s customer complaint concerns over variable annuity sales practices.

In March 2018 Crane disclosed a $131,644 tax lien against him. Prior to that, in November 2010 Crane disclosed a $34,101 tax lien against him. Large tax liens on a broker’s CRD can be a red flag that the broker may be influenced to engage in high commission activity in order to satisfy personal debts. FINRA discloses information concerning a broker’s financial condition because a broker’s inability to handle their own personal finances has also been found to be material information in helping investors determine if they should allow the broker to handle their finances.

In July 2004 a customer alleged that Crane provided negligent investment advice and breached his fiduciary duty concerning the purchase of a variable annuity. The amount of damages was not specified. The claim was settled for $225,000.

Broker Mark Upchurch Subject to Several Investment Complaints

September 9, 2019 | by Staff Attorney

The securities attorneys at Gana Weinstein LLP are currently investigating advisor Mark Upchurch (Upchurch), currently associated with Centaurus Financial, Inc. (Centaurus Financial) out of Houston, Texas. According to a BrokerCheck report, Upchurch has been subject to at least three customer disputes, one regulatory action, and one termination for cause during his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), the customer complaints against Upchurch concern allegations of unsuitable investment recommendations and misrepresentations.

In April 2018 a customer alleged that Upchurch made unsuitable investment recommendations and misrepresentations causing over $5,000 in damages. The claim settled for $17,500.

In October 2006 FINRA found that Upchurch violated NASD Rule 2110 by signing a customer’s name to an account transfer form without the customer’s permission. Without admitting or denying the allegations, Upchurch consented to the described sanctions and to the entry of the findings. Upchurch was fined $5,000 and suspended for 30 days.

Dana Hawkins Subject to Customer Disputes Over Structured Products

June 10, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Dana Hawkins (Hawkins), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to three customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Hawkins’ customer complaints allege that Hawkins made unsuitable recommendations in certain structured products.

Our firm has brought cases against brokers for misrepresenting the features of structured products or selling them as a bond alternative. Structured products are typically debt instruments where the payout is based on the underlying stock, equity index, currency, or any reference source. Many, but not all, structured products are advertised as having some principal protection component – meaning that the investor is guaranteed the return of some amount of their initial investment. However, studies have shown that structured products are often best used as a niche product for sophisticated investors employing complicated strategies. The typical investor cannot benefit from these products over traditional investments.

In February 2019 a customer filed a complaint alleging that Hawkins violated the securities laws by, among other things, that Hawkins sold unsuitable investments and several other allegations associated from activity in late 2013 to early 2019. The customer alleged $253,757 in damages. The claim is currently pending.

Centaurus Advisor Michael Fassi Subject to Complaints Over Alternative Investment Recommendations

May 30, 2019 | by Staff Attorney

Advisor Michael Fassi (Fassi), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to at least two customer complaints and one bankruptcy during the course of his career. According to a BrokerCheck report some of the customer complaints concern alternative investments such as direct participation products (DPPs) like non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In April 2019 a customer complained that Fassi violated the securities laws by alleging that the financial advisor recommended an unsuitable investment and several other allegations associated therewith in October 2015 causing $11,000 in damages. The claim is currently pending.

In November 2018 a customer complained that Fassi violated the securities laws by alleging that the financial advisor recommended an unsuitable investments in 2012 and several other allegations associated causing $275,498 in damages. The claim is currently pending.

Our firm often handles cases involving annuities and direct participation products, Non-Traded REITs, oil and gas offerings, equipment leasing products, and other alternative investments. These products are almost always unsuitable for investors. In addition, the brokers who sell them are paid additional commission in order to hype inferior quality investments which provides a perverse incentives by brokers to create an artificial market for products that no honest advisor would sell.

Centaurus Financial Broker Atul Makharia Has Several Suitability Complaints

February 6, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Atul Makharia (Makharia), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to at least three customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Makharia’s customer complaints allege that Makharia made unsuitable recommendations in a variety of investments including debt securities.

In November 2018 a customer brought a complaint against Makharia alleging the broker violated the securities laws by recommending unsuitable investments and several other allegations associated therewith causing $200,000 in damages. The claim is currently pending.

In October 2018 a customer brought a complaint against Makharia alleging the broker violated the securities laws by recommending unsuitable investments causing $333,000 in damages. The claim is currently pending.

Advisor William Burks Subject to Complaints Over Alternative Investments

February 6, 2019 | by Staff Attorney

Advisor William Burks (Burks), currently employed by Centaurus Financial, Inc. (Centaurus) has been subject to at least seven customer complaints and one criminal matter. According to a BrokerCheck report some of the customer complaints concern alternative investments and direct participation products (DPPs) such as non-traded real estate investment trusts (REITs), oil & gas programs, annuities, and equipment leasing programs. The attorneys at Gana Weinstein LLP have extensive experience handling investor losses caused by these types of products.

In May 2018 a customer filed a complaint alleging that Burks violated the securities laws by making unsuitable recommendations and the associated liquidity risks were not fully explained. The claim alleges $415,000 in damages and is currently pending.

In January 2016 a customer complained that Burks violated the securities laws by making unsuitable recommendations and misrepresentations. The claim alleges $32,000 in damages and was denied by the firm.

Centaurus Financial Broker Ricky Mantei Subject to Complaints Over Unsuitable Investments

January 4, 2019 | by Staff Attorney

According to BrokerCheck records financial advisor Ricky Mantei (Mantei), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to eight customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Mantei’s customer complaints allege that Mantei made unsuitable recommendations in certain corporate debt or other securities.

Our firm has brought cases against brokers for misrepresenting the features of structured products or selling them as a bond alternative. Structured products are typically debt instruments where the payout is based on the underlying stock, equity index, currency, or any reference source. Many, but not all, structured products are advertised as having some principal protection component – meaning that the investor is guaranteed the return of some amount of their initial investment. However, studies have shown that structured products are often best used as a niche product for sophisticated investors employing complicated strategies. The typical investor cannot benefit from these products over traditional investments.

In November 2018 a customer alleged that the financial advisor recommended unsuitable investments and several other allegations. The complaint alleges $100,000 in damages and is currently pending.

In October 2018 a customer filed a complaint alleging that their investments were unsuitable based on their investment objectives. The claim alleges $233,238,000 in damages and is currently pending.

In May 2018 the beneficiaries of a deceased customer allege that the Mantei recommended the client make unsuitable investments. The claim alleges $100,000 in damages and is currently pending.

Centaurus Financial Advisor Cindy Chiellini Subject to Multiple Customer Disputes

October 4, 2018 | by Staff Attorney

According to BrokerCheck records financial advisor Cindy Chiellini (Chiellini), currently employed by Centaurus Financial, Inc. (Centaurus Financial) has been subject to four customer complaints. According to records kept by The Financial Industry Regulatory Authority (FINRA), most of Chiellini’s customer complaints allege that Barber made unsuitable recommendations in certain corporate debt or other securities.

Our firm has brought cases against brokers for misrepresenting the features of structured products or selling them as a bond alternative. Structured products are typically debt instruments where the payout is based on the underlying stock, equity index, currency, or any reference source. Many, but not all, structured products are advertised as having some principal protection component – meaning that the investor is guaranteed the return of some amount of their initial investment. However, studies have shown that structured products are often best used as a niche product for sophisticated investors employing complicated strategies. The typical investor cannot benefit from these products over traditional investments.

In August 2018 a customer alleged that investments in their account had less liquidity than they originally instructed the broker they desired resulting in a loss of principal. The complaint alleges $175,000 in damages and is currently pending.

In June 2018 a customer filed a complaint alleging that investments presented and executed by the broker were not suitable. The claim alleges $5,000 in damages and is currently pending.

Centaurus Broker Bryon Martinsen Subject to Multiple Complaints Over Alternative Investments

January 20, 2017 | by Staff Attorney

Our investment attorneys are investigating customer complaints filed with The Financial Industry Regulatory Authority (FINRA) against Bryon Martinsen (Martinsen) currently associated with Centaurus Financial, Inc. (Centaurus) alleging unsuitable investments, breach of fiduciary duty, misrepresentations, and fraud among other claims. According to brokercheck records Martinsen has been subject to five customer complaints, one judgment or lien, and one employment termination for cause. Many of the complaints involve direct participation products (DPPs) such as non-traded real estate investment trusts (REITs) and other alternative investments.

Our firm has experience representing investment fraud victims with these investments against Centaurus. See Gana Weinstein LLP Wins Arbitration Award On Behalf of Client Against Centaurus Financial. In that case, the Claimant alleged that the broker involved invested over $2,000,000 in exclusively high cost products and 50% of those investments were in alternative investments such as private placements, oil and gas partnerships, and REITs. The other 50% was invested in variable and equity-indexed annuities. Award Can Be Found Here.

All of these investments come with high costs and have historically underperformed even safe benchmarks, like U.S. treasury bonds. For example, products like oil and gas partnerships, REITs, and other alternative investments are only appropriate for a narrow band of investors under certain conditions due to the high costs, illiquidity, and huge redemption charges of the products, if they can be redeemed at all. However, due to the high commissions brokers earn on these products they sell them to investors who cannot profit from them and have created a large market for a failed product. Further, investor often fail to understand that they have lost money in these illiquid investments until many years after investing. In sum, for all of their costs and risks, investors in these programs are in no way additionally compensated for the loss of liquidity, risks, or cost.