The U.S. Securities and Exchange Commission (SEC) has recently raised a serious allegation against Debbie Cavanaugh, a registered representative of Centaurus Financial, Inc. The allegation, currently pending, was made on 8/24/2023. It centers on a potential violation of Rule 151-1(a) of the Securities Exchange Act of 1934, otherwise known as Regulation Best Interest. Specifically, the SEC alleges that Cavanaugh failed to comply with the Care Obligation stipulated in Rule 151-1(a)(2)(ii).
Understanding the Allegation and the FINRA Rule
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In simpler terms, the SEC’s allegation against Cavanaugh hinges on the principle of acting in the best interest of the investor, a fundamental component of the financial advisory profession. The Care Obligation, part of Regulation Best Interest, requires that a broker-dealer exercise reasonable diligence, care, and skill when making investment recommendations to a client. This includes understanding the potential risks, rewards, and costs associated with the recommendation.
The Financial Industry Regulatory Authority (FINRA) maintains these standards and regulations to protect investors and maintain market integrity. Cavanaugh’s FINRA CRD number is 1268420, and she has been with Centaurus Financial, Inc. (CRD 30833) since 02/05/2020.
Why This Matters to Investors
This allegation is significant for investors because it underscores the importance of trust and integrity in the relationship between a financial advisor and their clients. When an advisor potentially violates a rule designed to protect the investor’s best interests, it can result in financial losses for the investor and undermine confidence in the financial advisory profession as a whole.
Furthermore, the allegation against Cavanaugh is a reminder of the critical role that regulatory bodies like the SEC and FINRA play in maintaining fair and transparent financial markets. They serve to hold financial professionals accountable for their actions, providing an additional layer of protection for investors.
Red Flags and Recovering Losses
Investors should be aware of several red flags that may indicate malpractice by a financial advisor. These include making unsuitable investment recommendations, failing to disclose important information about an investment, and making unauthorized transactions in a client’s account.
If you believe you have been a victim of such malpractice, it’s important to know that there are avenues for recourse. One of these is through FINRA Arbitration, a dispute resolution process that can help investors recover losses.
Haselkorn & Thibaut, a national investment fraud law firm with offices in Florida, New York, North Carolina, Arizona, and Texas, is currently investigating the advisor and company. With over 50 years of experience and a remarkable 98% success rate, they have successfully recovered financial losses for many investors. They offer free consultations to clients and operate on a “No Recovery, No Fee” policy. You can reach them at their toll-free consultation number, 1-800-856-3352.
