In a recent development that has sent shockwaves through the investment community, a serious allegation has been leveled against William Burks, a registered representative associated with Centaurus Financial, Inc. (CRD 30833) in Texas. According to the disclosure filed on February 21, 2024, the customers allege that Burks recommended unsuitable, high-risk, and illiquid investments, breaching his fiduciary duty. The case is currently pending, and while no specific dates for the alleged activity were identified in the Statement of Claim, the severity of the accusations has raised concerns among investors.
The potential impact of this case on investors cannot be overstated. When a financial advisor is accused of recommending unsuitable investments and breaching their fiduciary duty, it calls into question the trust and confidence that investors place in their advisors. The outcome of this case could have far-reaching consequences, not only for the clients directly affected but also for the broader investment community, as it may influence how advisors approach their responsibilities and how investors evaluate their relationships with their financial advisors.
Investment fraud and bad advice from financial advisors are unfortunately common occurrences in the financial industry. According to a Bloomberg article, the U.S. Securities and Exchange Commission (SEC) charged three individuals in February 2021 for their involvement in fraudulent schemes that targeted retail investors, resulting in millions of dollars in losses.
Understanding the allegations and FINRA rules
Table of Contents
To comprehend the gravity of the situation, it is essential to understand the key aspects of the allegations and the relevant FINRA rules. The customers allege that William Burks recommended unsuitable, high-risk, and illiquid investments. Suitability is a crucial concept in the financial industry, as FINRA Rule 2111 requires financial advisors to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for the customer, based on the customer’s investment profile, risk tolerance, and financial objectives.
Furthermore, financial advisors owe a fiduciary duty to their clients, which means they must act in the best interests of their clients and prioritize their clients’ interests above their own. Breaching this duty is a serious offense that can result in disciplinary action by FINRA and legal consequences.
The importance for investors
This case serves as a stark reminder of the importance of due diligence and vigilance when it comes to entrusting one’s financial future to an advisor. Investors must take an active role in understanding the investments recommended to them, asking questions, and ensuring that their advisor’s strategies align with their personal financial goals and risk tolerance.
Moreover, this case highlights the need for investors to stay informed about their advisors’ backgrounds and any potential red flags. By researching an advisor’s history through resources like FINRA’s BrokerCheck, which provides information on an advisor’s employment history, certifications, and any disclosures or complaints, investors can make more informed decisions about whom to trust with their financial well-being.
Red flags and recovering losses
Investors should be aware of potential red flags that may indicate financial advisor malpractice, such as:
- Recommending unsuitable, high-risk, or illiquid investments
- Failing to disclose material information about an investment’s risks or characteristics
- Engaging in unauthorized trading or making trades that are inconsistent with the client’s objectives
If an investor believes they have suffered losses due to the misconduct of their financial advisor, they may be able to recover damages through FINRA arbitration. Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating William Burks and Centaurus Financial, Inc. They offer free consultations to clients and work on a “No Recovery, No Fee” basis.
With over 50 years of experience and a 98% success rate, Haselkorn & Thibaut has a proven track record of helping investors recover losses stemming from financial advisor misconduct. Investors who believe they may have been victims of malpractice can contact the firm toll-free at 1-888-885-7162 for a free consultation.
The path forward
As the case against William Burks unfolds, it serves as a powerful reminder of the importance of transparency, integrity, and accountability in the financial industry. Investors must remain vigilant, informed, and proactive in protecting their interests, while financial advisors must uphold the highest standards of professionalism and ethical conduct.
By working together to promote a culture of trust, compliance, and investor protection, we can help build a stronger, more resilient financial system that benefits all participants. Cases like this underscore the critical role that regulators, law firms, and informed investors play in holding bad actors accountable and ensuring that the interests of investors remain at the forefront of the financial industry.
