Bryon Martinsen, a former registered representative with Centaurus Financial, Inc., faces allegations of mishandling clients’ investments, according to a pending customer dispute filed on January 3, 2024. The customers allege that Martinsen failed to invest their money in accordance with their goals and instead chose to invest the majority of their funds in high-risk, illiquid, non-traded REITs. The specific dates of the alleged activity were not identified in the Statement of Claim.
The dispute, which is currently pending resolution, involves debt corporate real estate securities and real estate securities. Martinsen, who holds the FINRA CRD number 1621649, was previously registered as a broker and investment advisor with Centaurus Financial, Inc. (CRD 30833) in the state of New York from October 7, 1999, to September 16, 2022.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating Bryon Martinsen and Centaurus Financial, Inc. The firm, with over 50 years of experience and a 98% success rate, offers free consultations to clients who may have suffered losses due to financial advisor malpractice.
According to a Bloomberg article, investment fraud and bad advice from financial advisors are not uncommon. The Securities and Exchange Commission (SEC) has taken action against several REIT executives for misleading investors, highlighting the importance of due diligence when investing in these complex financial products.
Understanding the Allegations and FINRA Rules
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The allegations against Bryon Martinsen center around the improper investment of clients’ money in high-risk, illiquid, non-traded REITs. Real Estate Investment Trusts (REITs) are investment vehicles that own and operate income-generating real estate properties. Non-traded REITs are not listed on public exchanges and often come with higher risks and lower liquidity compared to publicly-traded REITs.
FINRA Rule 2111, known as the “Suitability Rule,” requires financial advisors to have a reasonable basis to believe that a recommended investment or investment strategy is suitable for the customer, based on the customer’s investment profile. This profile includes factors such as age, financial situation, investment objectives, and risk tolerance.
If Bryon Martinsen indeed invested his clients’ money in high-risk, illiquid, non-traded REITs without considering their investment goals and risk tolerance, he may have violated FINRA’s Suitability Rule.
The Importance for Investors
The allegations against Bryon Martinsen highlight the importance of working with a trustworthy and competent financial advisor who prioritizes clients’ best interests. Investors should be aware of the risks associated with non-traded REITs, which may include:
- Lack of liquidity, making it difficult to sell shares when needed
- High fees and commissions that can erode investment returns
- Potential conflicts of interest between the REIT sponsor and investors
- Limited transparency and difficulty in assessing the true value of the REIT’s assets
Investors who have suffered losses due to financial advisor malpractice may be able to recover their losses through FINRA arbitration. It is crucial for investors to thoroughly research their financial advisors and the investments they recommend, asking questions and seeking clarification when necessary.
Red Flags and Recovering Losses
Investors should be vigilant for red flags that may indicate financial advisor malpractice, such as:
- Recommending investments that are inconsistent with the client’s risk tolerance and investment goals
- Failing to provide clear explanations of investment risks and fees
- Excessive trading or churning of client accounts to generate commissions
- Pressuring clients to make quick investment decisions without allowing adequate time for consideration
If an investor suspects that they have been a victim of financial advisor malpractice, they should contact a qualified investment fraud attorney. Haselkorn & Thibaut offers free consultations to help investors assess their cases and potential recovery options. The firm operates on a contingency basis, meaning clients pay no fees unless a recovery is obtained.
Investors can contact Haselkorn & Thibaut toll-free at 1-888-628-5590 to discuss their case and learn more about their rights and options for recovering losses through FINRA arbitration. With their extensive experience and impressive success rate, Haselkorn & Thibaut is well-equipped to guide investors through the complex process of holding financial advisors accountable for malpractice.
