Centaurus Financial Lawsuits: Broker Misconduct & Customer Complaints

FINRA Settlement over Variable Annuity Exchanges and Supervisory Failures (July 2026)

On July 15, 2026, Centaurus Financial (CRD # 30833) agreed to pay a $475,000 fine and approximately $634,000 in restitution to affected investors to resolve FINRA claims that gaps in its supervisory systems and procedures resulted in excessive variable annuity exchanges and violations of Regulation Best Interest. According to FINRA, the firm’s supervisory systems were inadequate over a nearly ten-year period, from early 2016 through the end of 2025. Centaurus neither admitted nor denied the allegations.

The settlement resolves two matters. In the first, FINRA alleged that Centaurus failed to reasonably supervise broker Patrick Carroll, who recommended 88 deferred variable annuity exchanges between early 2016 and October 2019 without a reasonable basis to believe the recommendations were suitable — in many cases moving customers into higher-fee variable annuities out of products he had recommended just three to five years earlier. FINRA also alleged the firm failed to investigate red flags raised by the recommendations. Carroll was fined $10,000 and barred from the industry for one year.

In the second matter, FINRA alleged that from 2020 to 2025 two Centaurus brokers recommended that customers purchase variable annuities in brokerage accounts and then add advisory services on the annuity sub-accounts for an ongoing 1% annual fee — collecting both commissions and advisory fees on the same assets. According to FINRA, the firm did not create and enforce policies and procedures to mitigate the conflicts of interest created by these incentives.

Variable annuity exchanges can generate new commissions for the broker while triggering surrender charges and new fee schedules for the investor. Centaurus customers who experienced frequent annuity exchanges or paid overlapping commissions and advisory fees may have grounds for a FINRA arbitration claim.

SEC Fair Fund Pays Investors Harmed by Structured Product Sales (2026)

In February 2023, the SEC found that eight registered representatives at Centaurus’s Lexington, South Carolina branch recommended VRSPs to 94 retail customers for whom the investments were unsuitable given their financial situations and needs. The SEC also found that the firm and supervisory principal Ricky Mantei failed to reasonably supervise the brokers. Centaurus, Mantei, and broker Atul Makharia paid a combined $1,100,991 in disgorgement, interest, and penalties into a Fair Fund for distribution to harmed investors. The March 2026 disbursement order moves those payments forward. Investors who paid commissions on VRSP purchases through Centaurus between June 2016 and July 2019 may be eligible.

FINRA Suspends Centaurus Broker over Alternative Investment Concentration (August 2025)

In August 2025, FINRA suspended a Centaurus Financial broker for four months and fined him $10,000 for recommending that customers hold unsuitably high concentrations of illiquid alternative investments, including non-traded REITs, non-traded BDCs, and interval funds, according to reporting by InvestmentNews. The broker settled without admitting or denying the findings. Over-concentration in illiquid alternatives is a recurring theme in customer complaints involving Centaurus Financial.

SEC Sanctions Centaurus Financial over GWG L Bond Sales (February 2025)

According to the SEC’s order, between June 2020 and April 2021, Centaurus and four of its brokers recommended GWG L Bonds to 18 retail customers without a reasonable basis to believe the recommendations were in those customers’ best interest. Many of the customers were retirees in their 70s, 80s, and 90s with moderate or conservative risk tolerances. GWG’s own prospectus described the L Bonds as high-risk, speculative, and suitable only for investors with substantial financial resources and no need for liquidity. GWG Holdings filed for Chapter 11 bankruptcy in April 2022, leaving L Bond investors facing substantial losses.

The SEC also found that Centaurus failed to enforce its own Regulation BI training requirements – roughly 35% of its representatives had not completed the firm-mandated training by the deadline, and several brokers sold L Bonds before completing the required product training. Without admitting or denying the findings, Centaurus agreed to a censure, a cease-and-desist order, and payment of a $160,000 civil penalty plus disgorgement and interest. Combined payments by the firm and the four brokers, totaling approximately $239,000, will be distributed to affected customers through a Fair Fund.

FINRA Actions Involving Centaurus Financial Brokers

Private Securities Transactions – California Broker Suspended (2025)

In January 2025, a Centaurus broker in Apple Valley, California was suspended for two years for participating in undisclosed private securities transactions. Between 2017 and 2022, the broker allegedly sold more than $4.4 million in stock of a cannabis-related company he co-founded to over 100 investors without firm approval, in violation of FINRA Rules 3280 and 2010.

Donnie Ingram – Excessive Commissions (2023)

In May 2023, former Centaurus advisor Donnie Ingram was suspended for six months, fined, and ordered to pay nearly $389,000 in restitution. FINRA found that he knowingly recommended higher-cost UITs and alternative investments when lower-cost options were available, benefiting himself at his clients’ expense. Centaurus was sanctioned for failure to reasonably supervise, fined $50,000, and held jointly liable for restitution.

Bryon Martinsen – Unauthorized Transactions

In August 2022, FINRA suspended broker Bryon Martinsen for 15 months after finding he engaged in approximately $1.1 million in undisclosed private securities transactions and made $400,000 in unauthorized customer payments. His record includes numerous customer complaints alleging unsuitable investments and over-concentration.

Tony Kassaei – Real Estate Ponzi Scheme

In September 2020, FINRA barred Centaurus advisor Tony Kassaei for undisclosed private securities transactions tied to a real estate Ponzi scheme that caused approximately $12 million in investor losses. Investors associated with Kassaei allegedly lost at least $1.3 million.

Larry J. Templin – Industry Bar

In October 2018, former Centaurus advisor Larry J. Templin was barred from the securities industry following alleged bank fraud. Centaurus terminated him in 2018 after more than a decade with the firm.

Firm-Level Regulatory Sanctions

• August 2016: Centaurus was fined $100,000 and ordered to pay $85,281 in restitution for failing to apply eligible UIT sales charge discounts due to inadequate supervisory systems.
• April 2009: FINRA fined Centaurus $175,000 for failing to safeguard confidential customer information following data security failures and a related phishing incident.

Centaurus Financial Lawsuits and FINRA Arbitration Claims

The White Law Group has represented investors in claims against Centaurus Financial. In February 2024, the firm filed a FINRA arbitration on behalf of a Texas family alleging unsuitable investments in complex, illiquid alternative products, along with claims for negligence, breach of fiduciary duty, and failure to supervise.

For investors with significant losses – often $100,000 or more – an individual FINRA arbitration is frequently a more effective recovery option than a class action, which is typically better suited to large groups of investors with relatively small claims.

How Investors Can Recover Centaurus Financial Losses

Brokerage firms have a duty to reasonably supervise their advisors and to prevent misconduct such as unsuitable recommendations, undisclosed outside business activities, and excessive commissions. Firms that fail to do so may be held liable for investor losses through FINRA arbitration, a process that is generally faster and less expensive than court litigation.

Frequently Asked Questions

What types of complaints have been filed against Centaurus Financial?

Customer complaints involving Centaurus Financial often allege unsuitable investment recommendations, excessive commissions, undisclosed private securities transactions, and inadequate supervision, particularly related to alternative and non-traded investments such as GWG L Bonds and non-traded REITs.

Can investors recover losses from Centaurus Financial?

Yes. Investors may be able to recover losses through FINRA arbitration if Centaurus Financial failed to supervise its advisors or allowed unsuitable or conflicted recommendations. The SEC’s 2025 order also established a Fair Fund to compensate certain GWG L Bond customers directly.

How long do I have to file a FINRA arbitration claim?

FINRA generally applies a six-year eligibility rule from the occurrence of the events giving rise to the claim, though other statutes of limitation may apply. Speaking with a securities attorney promptly is recommended.