Centaurus Financial, Inc. and former broker Bryon Martinson are facing allegations of recommending unsuitable investments in various illiquid alternative investments, according to a recent customer dispute filed on January 9, 2024. The customer’s statement of claim does not specify the dates of the alleged misconduct but seeks damages in an undisclosed amount. The dispute is currently pending resolution.
According to FINRA BrokerCheck, Bryon Martinson (CRD #1621649) was registered with Centaurus Financial, Inc. (CRD #30833) in the state of New York from October 7, 1999, to September 16, 2022. He is no longer registered as a broker or investment advisor.
Understanding unsuitable investment recommendations and FINRA Rule 2111
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FINRA Rule 2111, known as the “Suitability Rule,” requires that brokers and financial advisors have a reasonable basis to believe that their investment recommendations are suitable for their clients. This assessment should be based on factors such as the client’s age, financial situation, investment objectives, risk tolerance, and investment experience.
When a broker recommends unsuitable investments, they may be in violation of FINRA Rule 2111. Unsuitable investments can include those that are too risky, complex, or illiquid for a particular client’s needs and goals. In this case, the allegation involves recommending unsuitable illiquid alternative investments, which may have been inappropriate for the customer’s risk profile and investment objectives. Unsuitable investments can lead to significant financial losses for investors and are a common form of investment fraud.
The importance of suitable investment recommendations for investors
Suitable investment recommendations are crucial for investors because they help ensure that their portfolios align with their financial goals, risk tolerance, and overall investment strategy. When brokers recommend unsuitable investments, investors may face significant losses, liquidity issues, and difficulty achieving their financial objectives.
Illiquid alternative investments, such as those allegedly recommended by Bryon Martinson, can be particularly problematic for investors. These investments often have limited marketability, making it difficult for investors to sell their positions when needed. Additionally, illiquid alternative investments may have complex structures, high fees, and increased risk exposure, which can further compound the potential for losses.
Recognizing red flags and seeking help for investment losses
Investors should be aware of red flags that may indicate financial advisor malpractice, such as:
- Recommending investments that do not align with the investor’s risk tolerance or investment objectives
- Failing to properly explain the risks and characteristics of recommended investments
- Concentrating an investor’s portfolio in a single asset class or type of investment
- Pressuring investors to make quick decisions or invest in products they do not fully understand
If an investor believes they have suffered losses due to unsuitable investment recommendations or other forms of financial advisor misconduct, they may be able to recover their losses through FINRA arbitration. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the allegations against Bryon Martinson and Centaurus Financial, Inc.
With over 50 years of combined experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses through FINRA arbitration. The firm operates on a contingency fee basis, meaning clients pay no fees unless a recovery is obtained. Investors can contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-628-5590.
