The seriousness of allegations cannot be understated, especially when they involve financial matters that can potentially impact the livelihoods of investors. This is particularly true in the case of a pending customer dispute involving Fera Shivaee and Centaurus Financial, Inc., a dispute that revolves around the alleged recommendation of unsuitable, complex, high-risk, and illiquid investments.
Allegation’s Seriousness and Case Information
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The customer alleges that in early 2020, Fera Shivaee, a registered representative of Centaurus Financial, Inc., breached her fiduciary duty by recommending unsuitable, complex, high-risk, and illiquid investments. The customer is seeking damages of $100,000. The case, registered under the number 23-02116, is currently pending.
Shivaee, who has been with Centaurus Financial, Inc. since November 25, 1997, denies any wrongdoing. She asserts that the investments were suitable and recommended based on the customer’s objectives, goals, and financial circumstances. She also claims that the customer confirmed in writing that they had received and understood all the requisite investment documentation/disclosures.
Explanation in Simple Terms and the FINRA Rule
The Financial Industry Regulatory Authority (FINRA) is responsible for regulating brokerage firms and their registered representatives. One of their key rules is the obligation of brokers to recommend suitable investments to their customers, taking into account the customer’s financial situation, goals, and risk tolerance.
In this case, the customer alleges that Shivaee violated this rule by recommending complex, high-risk, and illiquid investments that were not suitable for their financial circumstances. These types of investments often carry higher risks and may not be easily sold or converted into cash, making them unsuitable for certain investors.
Why It Matters for Investors
Investors place a great deal of trust in their financial advisors, relying on their expertise to guide their financial decisions. When that trust is broken, it can result in significant financial loss and emotional distress. This case serves as a stark reminder of the importance of understanding the investments recommended by your financial advisor, and the potential consequences of not doing so.
Moreover, it highlights the importance of the role of regulatory bodies like FINRA in protecting investors from unsuitable or fraudulent investment recommendations. Cases like this underline the necessity for investors to be vigilant and proactive in understanding their investments and the actions of their financial advisors.
Red Flags for Financial Advisor Malpractice and How Investors Can Recover Losses
There are several red flags that can indicate potential financial advisor malpractice. These include frequent trading to generate commissions, recommending investments that don’t align with the investor’s goals or risk tolerance, and failure to provide adequate information about the risks and characteristics of recommended investments.
If you suspect malpractice, it’s important to take action. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating this case. With over 50 years of experience and a 98% success rate, they have helped countless investors recover their losses through FINRA arbitration. They offer free consultations and operate on a “No Recovery, No Fee” policy. You can reach them at their toll-free number, 1-800-856-3352.
FINRA arbitration is a dispute resolution process where an impartial arbitrator hears both sides and makes a decision. It can be a faster and less expensive alternative to litigation, and can help investors recover losses due to broker misconduct.
Remember, the seriousness of allegations such as these cannot be understated. It’s crucial to remain vigilant, understand your investments, and take swift action if you suspect wrongdoing.
