In a recent development, a customer has filed a complaint against Richard Acker, a registered representative of Centaurus Financial, Inc. (CRD 30833) in New York. The allegations, which are currently pending resolution, claim that from December 2011 through November 2013, Acker recommended unsuitable investments and investment strategies in various illiquid alternative investments, primarily involving real estate securities.
According to the disclosure on Acker’s FINRA BrokerCheck report (CRD #3061037), the customer dispute was filed on January 30, 2024, and the damage amount requested has not been disclosed. Acker has been registered with Centaurus Financial, Inc. as a broker since May 7, 2009, and is not currently registered as an investment advisor.
In response to the allegations, Acker has vehemently denied any wrongdoing, asserting that the claims are completely without merit. He maintains that the investments in question were suitable and were recommended based on the customer’s objectives, goals, and financial circumstances, and were only offered after the customer reviewed all material documentation related to the investment.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences in the industry. According to a Bloomberg article, investment fraud has been on the rise, with the SEC reporting a significant increase in fraudulent schemes, particularly those involving cryptocurrencies.
Understanding unsuitable investment recommendations and FINRA Rule 2111
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Unsuitable investment recommendations occur when a financial advisor recommends investments or strategies that are not aligned with a client’s risk tolerance, financial goals, or overall circumstances. FINRA Rule 2111, known as the “Suitability Rule,” requires that financial advisors have a reasonable basis to believe that their investment recommendations are suitable for the customer, based on the customer’s investment profile.
This profile includes factors such as the customer’s age, financial situation, investment objectives, liquidity needs, risk tolerance, and investment experience. Advisors must also ensure that their recommendations are consistent with the customer’s ability to understand the risks associated with the investment.
In the case of Richard Acker, the customer alleges that the recommended illiquid alternative investments and strategies were unsuitable. If these allegations are proven true, it could constitute a violation of FINRA Rule 2111.
The importance of suitable investment recommendations for investors
Suitable investment recommendations are crucial for investors, as they help ensure that their investments align with their financial goals and risk tolerance. When advisors recommend unsuitable investments, investors may face several consequences:
- Increased risk of financial losses
- Difficulty accessing funds due to illiquidity
- Inability to meet financial goals
- Emotional stress and loss of trust in financial advisors
Investors rely on the expertise and guidance of their financial advisors to make informed decisions about their investments. When advisors breach this trust by recommending unsuitable investments, it can have severe and long-lasting impacts on an investor’s financial well-being.
It is essential for investors to thoroughly review and understand the risks and characteristics of any investment before making a decision. If an investor believes they have been the victim of unsuitable investment recommendations, they should consider seeking legal counsel to explore their options for recovery, such as contacting investment fraud lawyers who specialize in handling such cases.
Red flags for financial advisor malpractice and recovering losses
Investors should be aware of potential red flags that may indicate financial advisor malpractice, such as:
- Recommendations that seem too good to be true
- Pressure to make quick investment decisions
- Lack of clear communication about investment risks
- Inconsistencies between an investor’s risk tolerance and the recommended investments
If an investor suspects that they have been the victim of unsuitable investment recommendations or other forms of financial advisor misconduct, they may be able to recover their losses through FINRA arbitration. This process allows investors to seek compensation for damages caused by the misconduct of their financial advisors or brokerage firms.
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 Richard Acker 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.
Investors who believe they may have been affected by the alleged misconduct of Richard Acker or Centaurus Financial, Inc. are encouraged to contact Haselkorn & Thibaut for a free consultation by calling their toll-free number at 1-888-885-7162 . The firm operates on a “No Recovery, No Fee” basis, meaning clients only pay if a successful recovery is obtained.
