Erez Law is currently investigating Centaurus Financial, Inc. broker Atul Makharia (CRD# 5070762) regarding unsuitable investment recommendations. He has been registered with Centaurus Financial, Inc. in Lexington, South Carolina, since 2015.
In February 2023, the United States Securities and Exchange Commission (SEC) instituted cease-and-desist proceedings against Centaurus Financial, Inc., Ricky Mantei, and Atul Makharia for their unsuitable recommendations of variable interest rate structured products (VRSPs).
The SEC sanctioned him to pay a $35,000 civil and administrative penalty and fine and suspended him for six months regarding his participation in the offering of a penny stock. The SEC found that Atul Makharia and other Centaurus Financial, Inc. registered representatives “recommended VRSPs to retail customers for whom such investments were unsuitable in light of each of the specific customers’ financial situations and needs.” The investigation found that investors:
- were at or approaching retirement age
- had an annual income of less than $100,000
- had a net worth of less than $500,000
- had a low or moderate risk tolerance
- had investment objectives that included, or were limited to, “income” and sought periodic interest payments
- had moderate or high liquidity needs
- had an investment time horizon of less than 15 years
- were unwilling to risk losing all or some of their principal invested in the VRSPs
Additionally, the SEC found that Centaurus Financial, Inc. failed to keep required records relating to customer accounts and to preserve the information for at least six years, as required. It was also found that Centaurus Financial, Inc. failed to keep records for changes in customer account investment objectives.
According to the SEC, Centaurus Financial, Inc. consented to a censure and agreed to pay disgorgement of $4,876 plus prejudgment interest of $623 and a civil penalty of $750,000. Ricky Mantei agreed to pay disgorgement of $92,650 plus prejudgment interest of $11,842 and a civil penalty of $206,000.
Atul Makharia Customer Complaints
Atul Makharia has been the subject of 10 customer complaints between 2017 and 2022, one of which was closed without action, according to his CRD report:
September 2022. “The customer alleges that the Registered Representative misrepresented unsuitable, high-risk, speculative and illiquid investments. No dates for the alleged activity were disclosed in the Statement of Claim.” The case is currently pending.
June 2020. “The customer alleges that the Registered Representative over concentrated the customer’s account(s) in unsuitable investments. No dates are provided within the Statement of Claim, however the relationship began at a prior broker/dealer.” The customer sought $100,000 in damages, and the case was settled for $70,000.
March 2020. “During the period 2017 through 2018, the customer alleges that the Registered Representative over concentrated her investment(s) in unsuitable, complex, high-risk, speculative and illiquid investments.” The customer sought $150,000 in damages, and the complaint was settled for $57,500. The complaint was regarding CDs and corporate debt and took place while he was registered with Centaurus Financial, Inc.
February 2020. “The customer alleges that the Registered Representative invested his account(s) in unsuitable investments and breached his fiduciary duty. No dates of alleged activity were disclosed in the Statement of Claim.” The customer sought $100,000 in damages, and the complaint was settled for $10,000. The complaint is regarding corporate debt and real estate securities and took place while he was registered with J.P. Turner and Company, aka Cetera Financial Group and Centaurus Financial, Inc.
November 2019. “The customers allege that the Registered Representative recommended unsuitable investments and breached his fiduciary duty. No dates are provided within the Statement of Claim.” The customer sought $160,000 in damages, and the complaint was settled for $30,000. The complaint took place while he was registered with Centaurus Financial, Inc. and was regarding CDs and corporate debt.
August 2019. “During the period 2018 through May 2019, [REDACTED] alleges that the Registered Representative over concentrated her investment(s) in unsuitable, complex, high-risk, speculative and illiquid investments.” The customer sought $600,000 in damages, and the complaint was settled for $30,000. The complaint took place while he was registered with Centaurus Financial, Inc. and was regarding CDs and corporate debt.
June 2019. “Between 2015 and 2018, the Customer alleges that the financial advisor misrepresented, recommended unsuitable investments and breached his fiduciary duty.” The customer sought $100,000 in damages, and the complaint was settled for $14,750. The complaint took place while he was registered with J.P. Turner and Centaurus Financial, Inc. and was regarding corporate debt.
November 2018. “Customer primarily alleges that the financial advisor recommended unsuitable investments and several other allegations associated therewith.” The customer sought $200,000 in damages and the case was settled for $35,180. This case is regarding corporate debt.
October 2018. “The customers allege their investments were unsuitable.” The customer sought $333,000 in damages and the case is was settled for $40,000. This case is regarding corporate debt. The complaint took place while he was registered with J.P. Turner and Centaurus Financial, Inc. and was regarding corporate debt.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Centaurus Financial, Inc. may be liable for investment or other losses suffered by Atul Makharia’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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