Joseph Michael Todd, a former broker and investment advisor associated with Centaurus Financial, Inc. (CRD 30833) from August 2016 to July 2022, has been permanently barred by the Securities and Exchange Commission (SEC) from the securities industry. The SEC’s action against Todd stems from allegations of serious misconduct, including misappropriation of investor funds, false statements, and fraudulent activities.
The Severity of the Allegations and Their Impact on Investors
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According to the SEC’s complaint, from at least August 2016 through November 2022, Joseph Michael Todd engaged in a range of fraudulent activities in connection with the offer, purchase, and sale of securities. The allegations include:
- Misappropriation of investor funds
- Falsely stating to investors that their funds would be invested in securities
- Sending out false account statements indicating that investors’ funds were fully invested and earning returns
- Engaging in various other conduct that operated as a fraud and deceit on investors
These allegations are of utmost seriousness, as they directly impact the financial well-being and trust of investors who placed their faith and hard-earned money in Todd‘s hands. The case information, as outlined in the SEC’s complaint, paints a picture of a systematic and ongoing scheme to defraud investors over a period of several years.
Understanding the Violations and FINRA Rules
The SEC’s complaint alleges that Joseph Michael Todd violated the following laws and regulations:
- Section 17(a) of the Securities Act of 1933
- Section 10(b) of the Exchange Act and Rule 10b-5 thereunder
These violations relate to fraudulent activities, misrepresentations, and omissions in connection with the offer, purchase, or sale of securities. The Financial Industry Regulatory Authority (FINRA), a self-regulatory organization that oversees broker-dealers, has specific rules in place to protect investors from such misconduct. FINRA Rule 2010 requires brokers to observe high standards of commercial honor and just and equitable principles of trade, while FINRA Rule 2020 prohibits brokers from effecting any transaction in, or inducing the purchase or sale of, any security by means of any manipulative, deceptive, or other fraudulent device or contrivance.
The Importance for Investors
The allegations against Joseph Michael Todd serve as a stark reminder of the importance of due diligence and vigilance when entrusting one’s financial future to a broker or investment advisor. Investors have the right to expect that their funds will be handled with integrity and invested in accordance with their agreed-upon objectives.
Misappropriation of funds, false statements, and fraudulent activities not only cause direct financial harm to investors but also erode the trust and confidence that are essential for the proper functioning of the securities markets. The SEC’s action against Todd underscores the critical role that regulatory oversight plays in protecting investors and maintaining the integrity of the financial system.
Red Flags and Recovering Losses
Investors should be aware of potential red flags that may indicate financial advisor malpractice or misconduct, such as:
- Unauthorized or unexplained transactions
- Inconsistencies between account statements and actual portfolio performance
- Pressure to make quick investment decisions or to invest in unregistered securities
- Promises of guaranteed returns or overly consistent profits regardless of market conditions
If an investor suspects that they have been a victim of financial advisor malpractice, they should promptly seek the advice of experienced legal counsel. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Joseph Michael Todd and Centaurus Financial, Inc. The firm has over 50 years of combined experience and a 98% success rate in helping investors recover their losses through FINRA arbitration.
Haselkorn & Thibaut offers free consultations to investors who may have suffered losses due to the misconduct of Joseph Michael Todd or other financial advisors. Investors can contact the firm’s experienced attorneys toll-free at 1-888-885-7162 to discuss their legal options. The firm operates on a contingency fee basis, meaning there are no fees unless a recovery is obtained.
The SEC’s action against Joseph Michael Todd serves as a powerful reminder of the importance of regulatory oversight, due diligence, and investor protection in the securities industry. By staying informed, vigilant, and seeking the guidance of experienced legal professionals when necessary, investors can better safeguard their financial interests and hold accountable those who engage in fraudulent or unethical practices.
