Centaurus Financial, Inc. (“Centaurus”) is a top-ranked broker-dealer and Registered Investment Advisor headquartered in Anaheim, California. While it was founded as an education and training company in 1992, Ron King and Bob Keilly purchased the firm in 1995 and converted it to a full-service independent broker-dealer as it stands today. In 2013, Centaurus expanded into the Pacific Northwest, with a corporate office in Coeur d’Alene, Idaho. In 2016, the firm expanded its presence in the Southeast, with a corporate office in the Atlanta, Georgia Metro Area. Centaurus also has a corporate office in Leesburg, Virginia.
In 2022, InvestmentNews ranked Centaurus 21st of the top 100 independent broker-dealers in the U.S. based on total revenue; it has $4.6B assets under management (AUM). Centaurus serves all 50 states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Centaurus’ corporate office has 90 team members. The firm is currently owned by Federation of Financial Services, Stephen M. Kremer, and Michael P. Rubino with Frank King’s son, Ron King, serving as the Chairman and CEO.
Financial Misconduct at Centaurus Financial
Centaurus is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
Centaurus has a long history of misconduct (23 disclosure events), paying out millions in securities arbitration awards and judgments. In October 2013, Centaurus faced a FINRA arbitration panel, after a customer alleged damages or losses from a Real Estate Investment Trust (REIT) stemming from breach of fiduciary duty, misrepresentation, omission of facts, suitability, failure to supervise, and negligence. As a result, Centaurus was ordered to pay $915,249.05.
In June 2016, it was found that Centaurus had failed to apply sales charge discounts to eligible Unit Investment Trust (UIT) purchases, resulting in customers paying excessive sales charges of about $85,281.62. Additionally, Centaurus was found to have failed to establish, maintain, and enforce a supervisory system reasonably designed to ensure that customers received sales charge discounts where eligible on all UIT purchases. It had been left to registered representatives to do so accurately. FINRA censured and fined Centaurus $100,000 and required the firm to pay $85,281.62 to customers.
Also in 2016, a FINRA arbitration panel ordered Centaurus to pay compensation of $150,600.01 to one of the parties and additional fees. This resulted from findings of account misrepresentation, omission of facts, failure to supervise, and negligence concerning:
- Hedge funds
- Private equities
- Variable annuities
- Limited partnerships
If a broker makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment, they may also be liable for investment losses. Each investment must be suitable for the specific investor, taking into consideration the investor’s age, net worth, risk tolerance, experience, and financial needs.
In June 2021, the Securities and Exchange Commission (SEC) fined Centaurus $250,000 and ordered it to pay $907,377 in disgorgement and $124,019 in prejudgment interest. Centaurus was found to have breached its fiduciary duty related to its receipt of third-party compensation from client investments with inadequate or no disclosure concerning its conflicts of interest. Some of these included:
- Mutual fund share classes that paid Centaurus 12B-1 fees;
- Specific mutual funds that generated service fee revenue; and
- Cash sweep products that resulted in Centaurus receiving revenue sharing.
There is currently a pending action, initiated September 27, 2022, against Centaurus. The case alleges that between September 2016 and September 2018, the firm failed to reasonably supervise a registered representative’s recommendations of UITs and alternative investments. In violation of FINRA rules. Brokerage firms that fail to supervise their agents may be liable for investment losses caused by their misconduct.
Wondering If You Have a Claim? Contact Our Firm Now!
Meyer Wilson reclaimed $350 million for the victims of investment fraud or misconduct. Our attorneys are experienced in going up against large investment firms, and our track record affirms our resources and expertise. Meyer Wilson has represented clients nationwide and internationally, in state and federal courts, and in arbitration through FINRA and the American Arbitration Association (AAA). As an investor, you have a right to recover investments lost through unethical behavior or decisions made against your interests.
If you believe that you have been the victim of investment fraud or have been recommended unsuitable investments, you may have options. Call Meyer Wilson today!