Gregory John Richards, a financial advisor with 24 years of experience based in Scottsdale, Arizona, currently faces seven FINRA customer complaints alleging investment misconduct. These complaints center on claims that Richards recommended unsuitable high-risk investments and misrepresented the nature of various investment products, resulting in substantial financial losses for his clients.
The pattern of complaints spans from 2018 to 2024, with three resolved settlements totaling $195,500 and five active arbitration cases still pending. The most significant settlement reached $140,000 in March 2024, stemming from a complaint filed in April 2023 that alleged nearly $500,000 in damages due to investment misrepresentation.
Nature of the Complaints
Table of Contents
Unsuitable Investment Recommendations
The core allegations against Richards involve recommending investment products that allegedly did not align with his clients’ stated financial objectives, risk tolerance, or investment timelines. These complaints frequently cite investments in:
- Oil and gas limited partnerships with high risk profiles
- Illiquid corporate bonds that restricted client access to funds
- Real estate investment ventures with speculative characteristics
- GWG Holdings securities and similar alternative investments
According to the complaints, many clients report that these investments were presented without adequate disclosure of their speculative nature or liquidity constraints, leaving investors unable to access their funds when needed.
Alleged Misrepresentation of Investment Risks
Several complaints allege that Richards failed to provide complete and accurate information about the risks associated with recommended investments. Clients claim they received incomplete risk disclosures while being presented with emphasis on potential returns, creating an unbalanced understanding of the investment opportunities.
Fiduciary Duty Breach Allegations
Multiple complaints allege that Richards breached his fiduciary duty by recommending investments that may have generated higher commissions for him rather than serving his clients’ best interests. Under securities regulations, financial advisors must prioritize client welfare over their own compensation when making investment recommendations.
Legal Proceedings and Resolutions
Completed Settlements
The resolution of complaints against Richards has resulted in three significant settlements over the past six years:
Most Recent Settlement (March 2024): $140,000 This settlement resolved a complaint filed in April 2023, which alleged that Richards misrepresented investment risks and suitability, leading to client damages of nearly $500,000.
Previous Settlements:
- July 2022: $32,500 settlement for alleged breach of fiduciary duty
- 2018: $23,000 settlement for unsuitable investment recommendation claims
Ongoing Arbitration Cases
Five FINRA arbitration cases remain active against Centaurus Financial, Richards’ former broker-dealer, relating to his conduct between 2018 and 2021. These cases focus on allegations of unsuitable investment advice and inadequate supervision by the firm.
Impact on Affected Investors
Financial Consequences
Investors who followed Richards’ investment recommendations have experienced various degrees of financial harm, including:
- Significant portfolio losses from underperforming high-risk investments
- Compromised retirement planning due to reduced account balances
- Limited liquidity from investments that cannot be easily sold
- Opportunity costs from funds tied up in unsuitable investments
Long-term Portfolio Effects
The complaints reveal that many investors have faced ongoing challenges including delayed retirement plans, concentrated positions in speculative investments, and difficulty rebalancing their portfolios due to illiquid holdings. These effects often extend beyond the initial investment period, creating lasting financial consequences.
Broker-Dealer Supervisory Responsibilities
Centaurus Financial’s Role
As Richards’ former broker-dealer, Centaurus Financial faces scrutiny regarding its supervisory obligations under FINRA regulations. Broker-dealers are required to maintain adequate systems to monitor their registered representatives and ensure that investment recommendations are suitable for clients.
The five pending arbitration cases against Centaurus Financial suggest that supervisory failures may have contributed to the alleged misconduct during Richards’ tenure with the firm.
Regulatory Framework
FINRA regulations establish clear expectations for broker-dealer supervision, including requirements to:
- Monitor investment recommendations for suitability
- Maintain adequate compliance and supervisory systems
- Ensure proper risk disclosure to clients
- Address red flags that may indicate unsuitable advice
Investment Products and Risk Factors
High-Risk Alternative Investments
The complaints frequently involve alternative investments that carry elevated risk profiles compared to traditional securities. These products often feature:
- Limited liquidity that restricts investor access to funds
- Complex structures that may be difficult for retail investors to understand
- Higher commission structures that may create conflicts of interest
- Speculative characteristics inappropriate for conservative investment strategies
Suitability Considerations
Proper investment suitability analysis requires consideration of multiple factors including the client’s financial situation, investment experience, risk tolerance, and liquidity needs. The complaints suggest that these factors may not have been adequately considered in Richards’ recommendations.
Warning Signs and Investor Protection
Recognizing Unsuitable Investment Advice
Investors should be alert to several warning signs that may indicate unsuitable investment recommendations:
- Investment products that don’t match stated risk tolerance
- Pressure to make quick investment decisions without adequate review time
- Lack of clear, written risk disclosures
- Complex investment structures without adequate explanation
- Overemphasis on potential returns without balanced risk discussion
Due Diligence Best Practices
Protecting your investments requires proactive steps including:
- Reviewing advisor backgrounds through FINRA BrokerCheck
- Requesting detailed written documentation of all investment recommendations
- Seeking second opinions on significant investment decisions
- Understanding liquidity requirements and investment timelines
- Regularly reviewing portfolio allocation and suitability
Legal Remedies Through FINRA Arbitration
The Arbitration Process
FINRA arbitration provides an efficient forum for resolving investment disputes without the time and expense of traditional litigation. The process typically involves:
- Filing a statement of claim outlining the investor’s allegations and damages
- Discovery phase where both parties exchange relevant documents
- Arbitration hearing before a panel of industry professionals
- Final award that may include monetary damages and other relief
Advantages of FINRA Arbitration
Compared to traditional court proceedings, FINRA arbitration offers several benefits:
- Faster resolution typically within 12-16 months
- Industry expertise from arbitration panel members
- Lower costs than federal court litigation
- Streamlined procedures designed for securities disputes
Time Limitations
Critical deadline: Investors must file FINRA complaints within six years of discovering the alleged misconduct. This statute of limitations makes prompt action essential for preserving legal rights.
How Haselkorn & Thibaut Can Assist
Our Approach to Investment Fraud Cases
At Haselkorn & Thibaut, we bring decades of experience to investment fraud and FINRA arbitration cases. Our comprehensive approach includes:
Initial Case Assessment We provide a thorough evaluation of your potential claims, including review of account statements, investment documentation, and communications with your advisor. This assessment helps determine the strength of your case and potential recovery opportunities.
FINRA Arbitration Representation Our experienced attorneys handle all aspects of the arbitration process, from filing the initial claim through final resolution. We work to build compelling cases that maximize your potential recovery while minimizing the time and stress involved in the proceedings.
Contingency Fee Structure We handle qualified investment fraud cases on a contingency fee basis, meaning you pay no attorney fees unless we recover money for you. This arrangement allows investors to pursue legitimate claims without upfront legal costs.
Our Track Record
Our firm has successfully represented numerous investors in FINRA arbitration proceedings, recovering millions of dollars for clients who suffered losses due to unsuitable investment advice, misrepresentation, and other forms of securities misconduct.
Taking Action: Next Steps for Affected Investors
Immediate Steps
If you invested with Gregory John Richards and experienced losses, consider taking these important steps:
- Gather all relevant documentation including account statements, correspondence, and investment materials
- Review your investment timeline to ensure any potential claims fall within the statute of limitations
- Document your losses and any communications about investment suitability
- Contact experienced legal counsel for a professional case evaluation
Why Prompt Action Matters
The six-year statute of limitations for FINRA claims makes timing critical. Additionally, early action allows for better preservation of evidence and more effective case preparation. Delays can significantly impact your ability to pursue recovery.
Contact Haselkorn & Thibaut for a Free Consultation
If you believe you have been harmed by unsuitable investment advice or misrepresentation, our experienced investment fraud attorneys are ready to evaluate your case and discuss your legal options at no cost.
We offer free consultations and work on a contingency fee basis for qualified cases.
Call Haselkorn & Thibaut today: 1-888-885-7162
Don’t let time run out on your opportunity for recovery. Contact us today to learn more about your rights and potential remedies.
