Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Valentino Scott (Scott), currently associated with Centaurus Financial, Inc., has at least 7 disclosable events. These events include 7 customer complaints, alleging that Scott recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $100,000.00 on November 11, 2024.
The customer alleges that in January 2020, the Registered Representative recommended and misrepresented an unsuitable, high-risk, illiquid investment and breached his fiduciary duty.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $150,358.00 on June 18, 2024.
The customer alleges that during the period of January 2019 through November of 2020, the Registered Representative recommended unsuitable, high-risk, illiquid investments and breached his fiduciary duty
FINRA BrokerCheck shows a pending customer complaint with a damage request of $98,000.00 on March 19, 2024.
The customer alleges that on October 1, 2019, the Registered Representative recommended an unsuitable, high-risk, investment and breached his fiduciary duty.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $50,000.00 on January 12, 2024.
The customer alleges that, specifically in January of 2019, the Registered Representative recommended an unsuitable, high-risk, speculative and illiquid investment.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $298,000.00 on October 06, 2023.
The customers allege that the Registered Representative recommended unsuitable, high-risk, speculative and illiquid investments, and breached his fiduciary duty. No specific dates for the alleged activity were identified in the Statement of Claim.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $25,000.00 on July 21, 2023.
The customer alleges that the Registered Representative recommended a risky, high yield, complex, illiquid investment.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $250,000.00 on June 20, 2023.
The customers allege that the Registered Representative recommended an unsuitable, high-risk and illiquid investment. No specific dates for the alleged activity were identified in the Statement of Claim.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. The cost of the recommendation and information about the investor are always included in material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, a brokerage firm should not depend solely on information from the issuer regarding a company, but must perform its own thorough investigation.
Additional, it should be required to mandate broker disclosures for investor’s protection. Brokers are required to report events to FINRA, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, as shown on their BrokerCheck reports. FINRA has acknowledged that recent studies provide evidence of the predictability of future regulatory and customer complaint issues for brokers with a history of such events. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Scott entered the securities industry in 1986. Scott has been registered as a Broker with Centaurus Financial, Inc. since 1995.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.