Investment fraud is a serious matter that can lead to significant financial loss for investors. Recently, a customer dispute was filed against registered representative William Dobbs and his affiliated company, Centaurus Financial, Inc. The allegation, which is currently pending, was made on September 29, 2023.
The Allegation
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The customer alleges that in May 2017, Dobbs recommended a speculative, high-risk, illiquid investment and breached his fiduciary duty. The alleged malpractice has resulted in a claimed financial loss of $50,000. Dobbs, however, denies any wrongdoing. He asserts that the investments were suitable and were recommended based on the customer’s objectives, goals, and financial circumstances. He further claims that the customer had reviewed all material documentation related to the investment and confirmed in writing that he fully understood the characteristics and risks of the investments.
FINRA Rule
The Financial Industry Regulatory Authority (FINRA) Rule 2111 requires that a firm or associated person have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer. This is based on the information obtained through the reasonable diligence of the firm or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose.
Why It Matters for Investors
Investment malpractice can lead to significant financial losses for investors. It is important for investors to understand the risks associated with an investment and to ensure that their financial advisor is acting in their best interest. If a financial advisor recommends an unsuitable investment or fails to adequately explain the risks associated with an investment, it can be considered a breach of fiduciary duty.
Red Flags for Financial Advisor Malpractice
- Recommendation of high-risk investments without a clear explanation of the risks involved
- Failure to consider the client’s financial situation, investment objectives, and risk tolerance
- Breach of fiduciary duty
Haselkorn & Thibaut, a national investment fraud law firm, is currently investigating this matter. The firm offers free consultations to clients and operates on a “No Recovery, No Fee” policy. With offices in Florida, New York, North Carolina, Arizona, and Texas, and over 50 years of experience, Haselkorn & Thibaut has a successful track record of financial recoveries for investors, boasting an impressive 98% success rate. They can be reached at their toll-free consultation number, 1-800-856-3352.
FINRA Arbitration
FINRA Arbitration is a quicker and less formal process than litigation and can help investors recover losses due to investment fraud or malpractice. Haselkorn & Thibaut specializes in this type of arbitration and has helped numerous investors recover their losses.
Investment fraud is a serious matter that should not be taken lightly. If you believe you have been a victim of investment fraud or malpractice, do not hesitate to reach out to Haselkorn & Thibaut for a free consultation.
