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Cetera Complaints and Regulatory Actions Overview

Cetera Advisors Overview, featured by top securities fraud attorneys, the White Law Group

The White Law Group is investigating claims involving Cetera Advisors.

The White Law Group has represented numerous investors with Cetera complaints. The following is a review of Cetera’s regulatory history, as well as information on FINRA claims filed by our firm. Cetera Advisors LLC and Cetera Advisor Networks LLC are wholly owned subsidiaries of Cetera Financial Group. Cetera Advisors reportedly employs 1,019 advisors and manages $21.2 billion.

Cetera Advisors reportedly has 22 disclosures on its broker record including 14 regulatory actions, 1 civil action and 7 arbitrations, according to the firm’s CRD record.

Based in El Segundo, California, Cetera Advisor Networks, LLC (CRD #13572), has a staff of 2,519 advisors and $50 billion in assets under management.  Cetera Advisor Networks reportedly has 35 disclosures on its broker record including 18 regulatory actions, 2 civil actions and 15 arbitrations, according to its CRD record.

Cetera Background

Cetera Financial has acquired numerous independent brokerage firms through the years including the following, among others: First Allied Securities, Summit Brokerage Services, JP Turner & Company, and Girard Securities.

A broker-dealer’s Central Registration Depository (CRD) record is a database maintained by the Financial Industry Regulatory Authority (FINRA) and is used to store and track information about individuals and firms involved in the securities industry.

Regulatory actions found on a broker-dealer’s CRD may include censures, fines, suspensions, and restitution, among others. They can have grave consequences for the firm’s profile and reputation.

The following is a review of Cetera’s customer complaints and regulatory actions. The review includes regulatory sanctions from the Financial Industry Regulatory Authority (FINRA), the US Securities Exchange Commission (SEC) and state regulators.

Cetera Customer Complaints

The White Law Group has represented numerous investors in FINRA claims against Cetera Advisors. These Cetera customer complaints often alleged unsuitable investment recommendations, among others.

FINRA Lawsuit filed against Cetera Advisors  In June 2022, The White Law Group filed a claim against Cetera Advisors on behalf of a California resident, alleging violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision.

Cetera Advisors LLC allegedly unsuitably invested its clients in Hospitality Investors Trust Inc. and other alternative investments. The FINRA claim was seeking damages in an amount between $500,000.01 and $1,000,000.

Cetera Complaint Alleges Unsuitable Alternative Investments

The White Law Group Files A Lawsuit Against Cetera Advisors LLC On October 5, 2021, The White Law Group filed a FINRA claim against Cetera Advisors LLC on behalf of residents from Florida and Oklahoma, seeking damages between $1,000,000 and $5,000,000. The lawsuit alleged that former Cetera financial advisor James (Greg) McKinney made unsuitable investment recommendations, including private placements, non-traded REITs, and high-risk investments.

The claim accused Cetera Advisors of failing to perform necessary due diligence on these investments before recommending them. McKinney has eight customer complaints against him, including allegations of unsuitable investments and misrepresentation. FINRA barred McKinney in 2019.

Multiple Cetera Complaints involving George Merhoff

Lawsuit Filed Against Cetera over High-Risk Investments  In March 2021, The White Law Group filed a FINRA claim on behalf of a retired Bend, Oregon couple alleging Cetera Advisor George Merhoff, Jr. unsuitably invested his clients in high-risk energy investments and MLPs.  The claim alleged violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision and seeks to recover losses between $500,000 and $1,000,000. George Merhoff, Jr., the broker of record, reportedly had 49 customer complaints at the time of the filing. Allegations included unsuitable investments and misrepresentation, among others. This was one of several claims The White Law Group filed against Cetera for alleged losses with George Merhoff Jr.

FINRA Claim Filed Against Cetera Advisors, LLC over Investment Losses  In April 2017, The White Law Group filed a FINRA claim against Cetera Advisors, LLC involving high risk oil & gas investments purportedly sold to clients by George Merhoff, Jr. This claim was submitted to FINRA Dispute Resolution on behalf of a California couple alleging claims for violation of common law fraud, breach of fiduciary duty, negligence, and negligent supervision.

Cetera Complaints and Broker Misconduct

There have been many cases of registered representatives employed by Cetera allegedly involved in broker misconduct and fraudulent activities.  Broker dealers are required to supervise their employees. If they fail to do so they may be held liable through a FINRA arbitration claim.

November 2023: Between May 2019 and July 2020, while associated with Cetera Advisors, a representative in Omaha, Nebraska negligently misrepresented death benefits following eight variable annuity exchanges, violating FINRA Rule 2010, according to FINRA. He also allegedly falsified three customers’ signatures on 13 documents, while registered with a different firm, violating FINRA Rules 2010 and 4511.  The representative was suspended for two-and-a-half months and fined $10,000.

April 2022: Cetera Advisors broker Marianne Smith (CRD#: 1587765) was reportedly barred from the securities industry after she allegedly deposited customer checks into accounts maintained by a third party. Between January 31, 2018, and February 27, 2021, three Cetera Advisors customers purportedly gave Smith ten checks totaling $45,100 made payable to a mutual fund company affiliated with the firm. The senior customers reportedly directed Smith to use the checks to fund their mutual fund investments. Smith instead allegedly used the money to purchase mutual fund shares for a family member of Smith.

June 2021: Cetera Advisor Networks broker David Rockwell of Cape Coral, Florida was sentenced to five years in federal prison for wire fraud and bank fraud after pleading guilty. As part of his sentence, the court also entered a money judgment of $1,018,000, the proceeds of his wire and bank fraud. Rockwell, who was registered with Cetera Advisor Networks, allegedly defrauded clients by stealing clients’ funds for his own personal use.

Rockwell also purportedly defrauded a federally insured bank when he applied for two lines of credit, totaling $700,000, in his clients’ names without their knowledge or permission. Rockwell allegedly used the funds that he had obtained from the loans for personal expenses.

Cetera Regulatory Actions

FINRA and the SEC may impose regulatory actions against financial advisors and broker-dealers such as censures, fines, suspensions and restitution, among others. Regulatory actions can have serious consequences for a broker-dealer’s profile and reputation.

Cetera Advisors currently has 22 regulatory events and Cetera Advisor Networks has 35, indicated by their CRD (broker reports). The following is a brief review of a few of the Cetera firms’ regulatory failures.

October 24, 2022: Cetera Advisors, LLC and Cetera Advisor Networks, LLC reportedly settled charges with the SEC for allegedly defrauding their advisory clients by failing to disclose several sources of compensation. Cetera reportedly breached their fiduciary duty by failing to properly disclose conflicts of interest related to the firms’ receipt of compensation in the form of 12b-1 fees, revenue sharing, administrative fees, and mark-ups, according to the SEC’s amended complaint. Cetera to pay $7 Million for Allegedly Defrauding Advisory Clients

December 2020: FINRA sanctioned 3 Cetera firms over alleged deficiencies in supervising dually registered representatives (DRRs). The Cetera firms allegedly failed to have a reasonably designed supervisory system in place to oversee certain private securities transactions conducted by their DRRs at unaffiliated or “outside” RIAs. Cetera Advisor Networks agreed to a fine of $750,000, Cetera Advisors agreed to a fine of $150,00 and Cetera Financial Specialists to a fine of $100,000. FINRA said that the firms were aware of the deficiencies as early as 2013. 3 Cetera Firms to pay $1 Million for Supervisory Issues

September 2019: The SEC charged Cetera Advisors with breaching its fiduciary duty and defrauding its retail advisory clients in connection with the sales of mutual funds. The SEC alleged that the firm failed to disclose conflicts of interest related to its receipt of undisclosed compensation. SEC charges Cetera Advisors with defrauding clients

December 2018: FINRA fined Cetera Advisor Networks $700,000 and ordered $691,800 in customer restitution in connection with excessive trades, also known as churning in the securities industry.

The Cetera broker, working in Chadds Ford, Pennsylvania allegedly made hundreds of short-term purchases and sales of A-share mutual funds in the accounts of 14 customers, some of them seniors. Cetera customers were reportedly charged new front-end commissions with each trade, to the benefit of the broker and the firm, but lost clients nearly $700,000 over a six-year period. Cetera fined $1.4 million for Churning

Failure to Supervise

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.

If your broker has defrauded you, you may be able to file a FINRA complaint against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can increase your chances of success.

How to File a Cetera Complaint

If you are considering filing a Cetera complaint, our securities attorneys have the experience to help you. If your brokerage agreement contains an arbitration clause, then disputes must be resolved through arbitration rather than in court. In the U.S., the Financial Industry Regulatory Authority (FINRA) typically oversees arbitration for disputes between customers and brokerage firms.

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.

Hire a FINRA Attorney – Cetera Complaints

If you have suffered investment losses and are considering filing a Cetera complaint, The White Law Group may be able to help you. Please call 888-637-5510 for a free consultation with our experienced FINRA attorneys. Our services are offered on a contingency fee basis.     

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 or investments attempt to recover their investment losses.

With offices in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit https://whitesecuritieslaw.com.

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