Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Eric Kuchherzki (Kuchherzki), currently associated with Centaurus Financial, Inc., has at least 5 disclosable events. These events include 5 customer complaints, alleging that Kuchherzki 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 $150,000.00 on December 31, 2024.
The customers allege that in February 2020, and in April 2021, the Registered Representative recommended and misrepresented an unsuitable, high-risk, illiquid investment.
FINRA BrokerCheck shows a settled customer complaint on August 04, 2023.
The customers allege that in April 2021, the Registered Representative recommended a unsuitable, high-risk, speculative investment and breached his fiduciary duty.
FINRA BrokerCheck shows a settled customer complaint on July 28, 2023.
During the period of October 2018 through November 2020, the customers allege that the Registered Representative recommended unsuitable, high-risk, speculative and illiquid investments and breached his fiduciary duty.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $120,000.00 on July 12, 2023.
During March 2020 and May 2021, the customers allege that the Registered Representative improperly recommended a high-risk and illiquid investment.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $50,000.00 on April 04, 2023.
In June 2020 and February 2021, the customer alleges that the Registered Representative improperly recommended high risk and illiquid investments.
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 part of 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, rather than depending solely on the issuer for company information, a brokerage firm should conduct its own reasonable investigation.
Another protective measure is to require broker discloses. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters. 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.
Kuchherzki entered the securities industry in 1997. Kuchherzki has been registered as a Broker with Centaurus Financial, Inc. since 2018.
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.
