Centaurus Financial Lawsuits: Broker Misconduct & Customer Complaints

The White Law Group reviews the regulatory actions and customer complaints involving Centaurus Financial, Inc.

The White Law Group is investigating potential securities claims involving Centaurus Financial, LLC.

Centaurus Financial, LLC (CRD#: 30833, Anaheim, CA) headquartered in Anaheim, CA, is a national financial advisory firm. The firm reportedly has 26 disclosure events on its broker record including 18 regulatory events and 8 arbitrations. Regulatory actions taken against a broker-dealer may include censures, fines, suspensions and restitution, among others. They can have serious consequences for a broker-dealer’s profile and reputation. The following is a review of FINRA and the SEC’s regulatory actions and investor lawsuits involving Centaurus Financial.

Broker Misconduct and Customer Complaints

There have been several cases of registered representatives employed by Centaurus Financial who were allegedly involved in broker misconduct and fraudulent activities.

January 14th, 2025: A Centaurus broker in Apple Valley, California was reportedly suspended for 2 years by FINRA. From July 2017 to October 2022, while associated with Centaurus Financial, the broker  participated in private securities transactions related to a private offering of common stock issued by a licensed cannabis-related company that he co-founded and for which he served as a board member and executive officer. The broker’s private securities transactions involved the sale of $4,436,381 of company stock to 106 investors. By participating in private securities transactions without prior approval from his firm, he violated FINRA Rules 3280 and 2010.

Centaurus and Advisor Donnie Ingram Fined over ‘Unnecessary’ Commissions

May 5th, 2023: Donnie Ingram, a former financial advisor with Centaurus Financial, was reportedly suspended by FINRA for six months, from May 15, 2023, through November 14, 2023. He was also ordered to pay $15,000 in sanctions and $388,962.13 in restitution.  Specifically, he reportedly recommended that clients purchase standard unit investment trusts (UITs) that carried higher transactional sales charges, despite the availability of lower-cost, fee-based versions of the same UITs. Ingram was aware that the fee-based options would have saved his clients money but chose the higher-cost versions for his own financial benefit.

Additionally, Ingram recommended that nine of his clients purchase alternative investments through Centaurus, even though the same investments could have been obtained at a lower cost through his own investment advisory firm, where selling commissions could have been avoided due to existing advisory agreements. He was allegedly aware of this cost-saving option but still reportedly directed clients toward the more expensive route, again to his financial advantage. FINRA found that Ingram did not act with commercial honor and failed to uphold just and equitable principles of trade by knowingly recommending costlier investment products when less expensive, equally suitable alternatives were available.

Centaurus was reportedly sanctioned for failure to reasonably supervise Ingram’s recommendations and was censured and fined $50,000 and ordered to pay restitution of $388,962.13 jointly and severally with Donnie Ingram.

Bryon Martinsen: Customer Complaints

On August 19, 2022: The Financial Industry Regulatory Authority (FINRA) suspended broker Bryon Martinsen (CRD #1621649) for 15 months and imposed a fine after he reportedly participated in private securities transactions involving approximately $1.1 million in alternative investments without notifying his firm. These transactions allegedly included introducing firm clients to buyers or purchasing the investments himself.

Martinsen also purportedly made at least 150 unauthorized payments totaling $400,000 to compensate customers for losses on prior investments, which were neither reported to nor approved by his firm. Additionally, he allegedly falsely denied his involvement in these transactions and payments on compliance questionnaires. Martinsen, who was reportedly affiliated with Centaurus Financial  since 1999, has a history of misconduct, including 11 customer complaints alleging issues like over-concentration and unsuitable investments. He was reportedly previously dismissed from AXA Advisors for alleged involvement in unauthorized business activities.

Real Estate Ponzi Scheme, $12 Million in Investor Losses

September 2020 – FINRA Reportedly Bars Centaurus advisor Tony Kassaei for allegedly engaging in undisclosed and unapproved private securities transactions involving at least $2.6 million invested in real estate businesses. Most investors were clients of his firm, which had not approved the transactions nor recorded them on its books. The business owner involved had previously worked with Kassaei and later pled guilty to operating a real estate Ponzi scheme that caused about $12 million in losses. Investors linked to Kassaei’s activity allegedly lost at least $1.3 million. Kassaei was reportedly paid over $125,000 and denied involvement in a $500,000 transaction when questioned by his firm.

Broker Barred after Alleged Bank Fraud

October 2018 – Former Centaurus advisor Larry J. Templin was reportedly barred from the securities industry by the Financial Industry Regulatory Authority (FINRA) in October 2018 after alleged bank fraud charges came to light.

Templin’s FINRA BrokerCheck report indicates that he was a registered representative with Centaurus Financial Inc. in Temple, Texas from September 2006 through June 2018 when he was reportedly dismissed for “alleged bank fraud”.

More Regulatory Sanctions:  Centaurus Financial

August 2016 – Centaurus Financial was censured, fined $100,000 and required to pay $85,281.62 in restitution to customers after it allegedly failed to identify and apply sales charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs), resulting in customers paying excessive sales charges of approximately $85,281.62. The findings stated that the firm failed to establish, maintain, and enforce a supervisory system and WSPs reasonably designed to ensure customers received sales charge discounts on all eligible UIT purchases. The firm relied primarily on its registered representatives to apply appropriate UIT sales charge discounts to customer purchases, but did not ensure that the sales charge discounts were identified and calculated accurately. (FINRA Case #201404167660)

April 2009 – FINRA fined Centaurus Financial, Inc. $175,000 for its alleged failure to protect certain confidential customer information. Centaurus was also ordered to provide notifications to affected customers and their brokers and to offer these customers one year of credit monitoring at no cost.

FINRA found that from April 2006 to July 2007, the firm failed to ensure that it safeguarded confidential customer information. Its improperly configured computer firewall – along with an ineffective username and password on its computer facsimile server – permitted unauthorized persons to access stored images of faxes that included confidential customer information, such as social security numbers, account numbers, dates of birth and other sensitive, personal and confidential data. The firm’s failures also permitted an unknown individual to conduct a “phishing” scam. When CFI became aware of the phishing scam, the firm conducted an inadequate investigation and sent a misleading notification letter to approximately 1,400 affected customers and their brokers.

Class Action Lawsuit vs. Individual FINRA Arbitration Lawsuit

You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration lawsuit.  The answer depends on many factors, but typically if the loss sustained is large — say larger than $100,000 — an individual FINRA arbitration claim is likely a better option.  Class action lawsuits as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Centaurus Financial Lawsuits

Over the years, our firm has represented several investors in claims against Centaurus Financial. Most recently, in February 2024, The White Law Group filed a FINRA Arbitration claim on behalf of a family in Texas, alleging violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision. The claim alleged that Centaurus Financial unsuitably invested its clients in a variety of complex, non-traded alternative investments.

Help for Investors

All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.  Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.

Free Consultation

If you have concerns regarding investments with Centaurus Financial and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.