The White Law Group is reviewing the regulatory history of Center Street Securities Inc.
Center Street Securities (CRD#: 26898/SEC#: 8-42786, Nashville, TN), a FINRA regulated broker-dealer, is headquartered in Nashville, TN. The national financial advisory firm reportedly has 6 regulatory events indicated by its broker record.
The White Law Group has filed several lawsuits against Center Street Securities over the years, including the following:
In June 2022, the White Law Group filed a FINRA claim on behalf of a Delaware family against Center Street Securities, Inc. for investment losses involving high-risk GWG L Bonds and other alternative investments.
The lawsuit, submitted to FINRA Dispute Resolution alleged violations of common law fraud, breach of fiduciary duty, negligence, and negligent supervision. The claim further alleges that Center Street Securities, Inc. unsuitably invested its clients in the high-risk GWG Series L Bond, securities sponsored by GWG Holdings, a Dallas-based financial services firm. GWG Holdings, Inc filed for Chapter 11 bankruptcy protection on April 20, 2022, after failing to make $13.6 million in interest payments to bondholders in January.
In February 2020, the White Law Group filed a FINRA claim against Center Street Securities on behalf of a Sellersburg, Indiana couple. The Statement of Claim alleges Center Street unsuitably invested its clients in high-risk private placements and non-traded REITs:
Regulatory Actions involving Center Street
Regulatory actions can include censures, fines, suspensions, or even the revocation of a broker’s license. These actions indicate instances where the broker or firm has engaged in misconduct or failed to meet regulatory requirements.
In January 2023 we reported that FINRA censured and fined Center Street Securities $70,000 and ordered the firm to pay partial restitution of $89,652.50, plus interest.
FINRA found that between May 4, 2018, and June 29, 2018, the firm allegedly negligently failed to tell 20 investors in an offering related to GPB Capital Holdings, LLC that the issuer failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements.
November 2015: Center Street was censured and fined $50,000 in 2015. Between May 2012 and January 2014, Center Street reportedly failed to conduct 18 branch examinations within three years as required by FINRA rules. In addition, Center Street failed to establish, maintain and enforce a reasonable supervisory system and supervisory procedures for the review and supervision of consolidated account reports produced by its registered representatives and provided to its customers.
Center Street Sanctioned for GWG Debentures
In August 2014 Center Street was censured and fined $100,000. The firm, through the actions of multiple registered representatives, allegedly made unsuitable recommendations to customers to purchase GWG Renewable Secured Debentures, an illiquid and high-risk alternative investment, in violation of NASD Rule 2310 and FINRA Rules 2111 and 2010. (GWG Holdings has since filed for bankruptcy leaving massive losses for investors.)
According to FINRA, these recommendations were unsuitable because the high risk nature of the GWG Debentures was inconsistent with certain customers’ investment objectives and risk tolerances and because the purchases represented an excessive concentration of the customers’ total investable assets or net worth in a speculative and high-risk security.
Among other alleged violations, Center Street also failed to maintain an adequate supervisory system and adequate written supervisory guidelines and failed to reasonably supervise the sales of GWG debentures by its representatives, in violation of NASD Rule 3010 and FINRA Rule 2010.
Broker Misconduct and Customer Complaints
Broker-Dealers registered with FINRA are required to supervise their associates. If they fail to do so, they can be held liable by filing a FINRA arbitration claim.
There have been several instances of registered representatives employed by Center Street Securities who were allegedly involved in broker misconduct and fraudulent activities. Numerous complaints have been filed against the firm alleging unsuitable investment recommendations.
In 2022 and 2023, two complaints were filed in Prescott Arizona against a registered representative of Center Street Securities. One of the complaints alleges that the broker improperly recommended unsuitable high risk GWG L Bonds to his clients.
The broker has reportedly been the subject of five customer complaints, two within the last year.
The SEC, in 2018, charged Sean Kelly of Marietta, GA with an ongoing fraudulent scheme while he was reportedly registered with Center Street. Kelly, through his dba entities (Lion’s Share), allegedly raised at least $1,000,000 from at least 12 investors, purportedly promising that he would invest the funds in a variety of investment vehicles, such as CDs, private placements and real estate funds.
Instead of investing the money, Kelly purportedly stole it and spent his victims’ money for things like Super Bowl tickets, luxury vacations and cash withdrawals. Many of Kelly’s victims were reportedly elderly retirees, and his victims include widows, veterans and people with disabilities. The SEC reportedly barred Kelly and ordered him to pay a disgorgement in 2018.
Satya Shaw of Wesley Chapel, FL was affiliated with Center Street Securities from January 2010 until November 2016. FINRA reportedly suspended Shaw in 2017 for allegedly engaging in six outside business activities without seeking prior approval from his member firm, Center Street Securities. He reportedly has nine regulatory actions on his record and numerous customer complaints, according to FINRA.
Investigating Potential Claims
Brokers and financial advisors may commit investment or securities fraud in an effort to control the market, gain business, or maximize commissions.
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.
Hiring a Securities Attorney
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.
Although our offices are in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country.
If you have questions about investments you made with Center Street Securities, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s office at 888-637-5510.
For more information on The White Law Group, please visit our website at https://whitesecuritieslaw.com.
Tags: Center street advisor, Center street regulatory actions, Center street review, Center Street Securities, FINRA attorney Last modified: May 16, 2023