California Couple Files FINRA Claim Against Centaurus Financial Over Unsuitable Investment Losses
The White Law Group has filed a FINRA arbitration claim on behalf of a California couple nearing retirement against Centaurus Financial. The claim alleges the couple’s broker recommended a series of unsuitable investments, including Shopoff OC Development Fund, Shopoff Fund IV, Shopoff DLV QOZ, Pacific Oak Strategic Opportunity REIT, a Bluerock-sponsored offering, Cottonwood Communities, and an MH Venture Fund, among others. The couple is seeking damages of $100,000 to $500,000. If you invested through Centaurus Financial and suffered losses, you may be able to speak with our FINRA arbitration attorneys about your options.
What the Claim Alleges
The claim alleges the broker recommended a concentrated mix of illiquid private placements and non-traded real estate investments without adequately considering the couple’s age, retirement timeline, risk tolerance, or need for liquidity. The claimants allege that Centaurus Financial, as the FINRA member firm responsible for supervising the broker’s recommendations, failed to catch and stop a pattern of unsuitable sales to clients approaching retirement.
Investments Named in the Claim
Among the investments identified in the claim are:
- Shopoff OC Development Fund, a Regulation D private placement
- Shopoff Fund IV, a Regulation D private placement
- Shopoff DLV QOZ Fund, LLC, a Regulation D private placement structured as a Qualified Opportunity Zone investment
- Pacific Oak Strategic Opportunity REIT, a publicly registered non-traded REIT
- A Bluerock-sponsored non-traded investment
- Cottonwood Communities, Inc., a non-traded, perpetual-life NAV REIT
- An MH Venture Fund real estate offering
The claim identifies these as just some of the investments recommended to the couple, which together spanned both Regulation D private placements and non-traded REITs — a combination that can compound illiquidity and concentration risk in a retirement portfolio.
Managing Partner Statement
“A couple nearing retirement needs a portfolio they can rely on for income and access to when they need it, not money spread across a string of illiquid private placements and non-traded REITs,” said Dax White, managing partner of The White Law Group. “We believe there may be other Centaurus Financial clients who were sold similar investments and don’t yet realize they have recourse.”
Can Centaurus Financial Be Held Responsible?
Broker-dealers are required to supervise the recommendations made by their registered representatives. When a firm fails to catch unsuitable or overconcentrated recommendations, especially for clients nearing retirement, it can be held liable for the resulting losses, even if it did not directly make the recommendation itself.
Recovering Losses from Private Placement and Non-Traded REIT Investments
Investors who were sold unsuitable private placements or non-traded REITs may be able to recover losses through FINRA arbitration. The White Law Group is investigating potential claims on behalf of other investors who worked with this broker or firm and were recommended similar investments.
Contact The White Law Group
The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago and Seattle. If you invested through Centaurus Financial and believe you were sold unsuitable private placements or non-traded REITs, call us today at (888) 637-5510 for a free consultation, or contact us online.
Frequently Asked Questions
1. How do I file a claim to recover money I invested through Centaurus Financial?
Most brokerage account agreements typically include a pre-dispute arbitration clause, which many investors don’t know exists until they need it. That means claims like this are generally filed and resolved through FINRA arbitration rather than in court, and arbitration can still result in a monetary recovery for investors.
2. What makes a private placement or non-traded REIT recommendation “unsuitable”?
A recommendation is unsuitable when it doesn’t match an investor’s risk tolerance, liquidity needs, or investment goals. Private placements and non-traded REITs are illiquid and hard to value, making them generally inappropriate for a large share of a retail investor’s portfolio, especially for someone nearing retirement.
3. Can Centaurus Financial be held responsible even if it didn’t directly approve the investment?
Yes. Broker-dealers have a duty to supervise their registered representatives’ recommendations. If a firm’s supervisory system failed to catch a pattern of unsuitable sales, the firm may be liable for the resulting losses.
