Securities Lawyers Blog
The Financial Industry Regulatory Authority (FINRA) sanctioned Centaurus Financial, Inc., (Centaurus) concerning allegations that Centaurus failed to supervise the business activities of five representative in the dissemination of communications concerning the risks of certain private placements. FINRA fined the firm $25,000
Centaurus became a FINRA member firm in 1993 and is headquartered in Anaheim California. The firm has 367 branch offices and approximately 585 registered individuals. The firm operates as a privately held independent broker-dealer and engages in various securities businesses including corporate and municipal debt, mutual funds, direct investments, and private placements.
FINRA alleged that at various times during from February 2009, through January 2010, five Centaurus registered representatives functioned as wholesalers for an unaffiliated investment management firm. FINRA alleged that Centaurus written supervisory procedures did not address the supervision of wholesaling activities and Centaurus did not supervise the wholesaling activities of the five representatives in violation of NASD Rule 3010. FINRA found that the five representatives did not use their Centaurus e-mails for wholesaling activities and instead used the investment management firm’s email address to send communications.
FINRA further alleged that Centaurus did not review or retain the representatives’ emails in violation of SEC and FINRA rules. FINRA found that the five representatives also distributed twelve communications related to the private placements and the investment management firm to other FINRA firms. FINRA found that several of the communications failed adequately to disclose risks, were misleading, made unwarranted performance claims, and had other sales material content deficiencies in violation of FINRA rules concerning the contents of communications.
The attorneys at Gana Weinstein LLP are experienced in investigating claims concerning misleading sales materials and private placements. Our consultations are free of charge and the firm is only compensated if you recover.