According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Dana Hawkins (Hawkins), currently associated with Centaurus Financial, Inc., has at least 2 disclosable events. These events include one customer complaint, one tax lien, alleging that Hawkins recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on February 07, 2025.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted against Centaurus Financial, Inc. (‘Centaurus’), Debbie M. Cavanaugh (‘Cavanaugh’), Michael Y. Hamilton (‘Hamilton’), Dana Matthew Hawkins (‘Hawkins’), and Timothy N. Tremblay (‘Tremblay’) (collectively, the ‘Respondents’). In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (‘Offers’) which the Commission has determined to accept. On the basis of this Order and Respondents’ Offers, the Commission finds that: Between June 30, 2020, the compliance date for Regulation Best Interest (‘Regulation BI’), and approximately April 16, 2021 (the ‘Relevant Period’), Respondents did not comply with Regulation BI in connection with their recommendations of corporate bonds called ‘L Bonds’ offered by GWG Holdings, Inc. (‘GWG’) to certain retail customers. According to GWG’s disclosures during the Relevant Period: (a) L Bond investments involved a high degree of risk, including the risk of losing an investor’s entire investment; (b) L Bond investments May be considered speculative; (c) L Bond investments were only suitable for investors with substantial financial resources and no need for liquidity in the investment; and (d) GWG May use a portion of the L Bond proceeds to repay existing L Bond holders. Despite these disclosures, Centaurus and its registered representatives – Respondents Cavanaugh, Hamilton, Hawkins and Tremblay, recommended the purchase of L Bonds to 18 retail customers for whom Respondents did not have a reasonable basis to believe that the recommendations were in those customers’ best interest based on those customers’ investment profiles and the potential risks, rewards, and costs associated with the L Bonds. As a result, Centaurus, Cavanaugh, Hamilton, Hawkins and Tremblay did not comply with the Customer-Specific Prong of Regulation BI’s Care Obligation found in Exchange Act Rule 15l-1(a)(2)(ii)(B). Centaurus also did not reasonably enforce its own written policies and procedures requiring personnel to take training related to Regulation BI and training related to a 2020 Offering of GWG L Bonds. As a result, Centaurus did not comply with Regulation BI’s Compliance Obligation found in Exchange Act Rule 15l-1(a)(2)(iv). By not complying with these Regulation BI component obligations, the Respondents each willfully violated Regulation BI’s General Obligation found in Exchange Act Rule 15l-1(a)(1).
FINRA BrokerCheck shows a settled customer complaint with a damage request of $15,000.00 on April 14, 2024.
The customer alleges that the Registered Representative recommended an unsuitable, high-risk, investment and breached his fiduciary duty. No specific dates for the alleged activity were identified in the Statement of Claim.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest.
Finally, an advisor must also analyze the specific account features offered and determine whether their client can benefit from them in order to meet their care obligations. While securities and investments come with costs that must be considered, the type of securities account also has changes the cost equation for the investor and can change the retail customers’ future investment returns. The associated person must consider the different types of securities accounts for their client and determine whether or not the cost or features are reasonably needed for the client or if the customer’s current account costs and features are superior to solutions available to the advisor. In any event, the type of account and services recommended must be in the investor’s best interest.
Hawkins entered the securities industry in 2011. Hawkins has been registered as a Broker with Centaurus Financial, Inc. since 2015.
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.