Allegations of financial malpractice are serious matters that demand immediate attention. In the financial world, such allegations can have far-reaching implications for both the accused and the accuser. The Financial Industry Regulatory Authority (FINRA), the largest independent regulator for all securities firms doing business in the United States, has strict rules and regulations in place to ensure that all parties involved in a dispute are treated fairly and justly.
Understanding the Allegation and FINRA Rule
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The allegation at hand involves Atul Makharia, a registered representative of Centaurus Financial, Inc.. The customers claim that Mr. Makharia recommended unsuitable, high-risk, speculative, illiquid investments and breached his fiduciary duty. The customers did not specify any dates for the alleged activity in their statement of claim. The claimed damages amount to $499,000.
Mr. Makharia has denied any wrongdoing, asserting that the allegations are completely without merit. He states that the investments about which the customers complained were suitable and were recommended based on the customer’s objectives, goals, and financial circumstances. He further states that the customers confirmed in writing that they not only received the requisite investment documentation/disclosures, but that they fully understood the characteristics and risks of the investments.
Under FINRA Rule 2111, brokers are required to have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. This rule is in place to protect investors and ensure that their financial advisors are acting in their best interests.
Why It Matters for Investors
Allegations of this nature are of utmost importance to investors. The relationship between an investor and their financial advisor is one of trust. When that trust is violated, it can result in significant financial loss for the investor. Therefore, it is essential that investors understand their rights and the measures they can take if they believe they have been the victim of financial malpractice.
Red Flags for Financial Advisor Malpractice
- Unsuitable investments: If your financial advisor recommends investments that do not align with your financial goals or risk tolerance, this could be a sign of malpractice.
- High-risk investments: If your financial advisor is pushing you towards excessively risky investments without adequately explaining the risks, this is a red flag.
- Lack of transparency: If your advisor is not providing you with all the necessary information about an investment, this could indicate malpractice.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating this matter. With over 50 years of experience and a 98% success rate, they offer free consultations to clients and operate on a “No Recovery, No Fee” policy. If you believe you have been the victim of financial malpractice, you can reach them at their toll-free consultation number, 1-800-856-3352.
How FINRA Arbitration Can Help
FINRA Arbitration is a dispute resolution process that is faster, less formal, and often less expensive than litigation. It can be an effective way for investors to recover losses resulting from investment fraud or malpractice. Haselkorn & Thibaut has extensive experience in FINRA Arbitration, and their impressive track record of successful financial recoveries for investors speaks for itself.
Investors should not have to bear the burden of financial loss due to the malpractice of their advisors. If you suspect you have been a victim, don’t hesitate to reach out to Haselkorn & Thibaut for a free consultation.
