Erez Law recently filed a FINRA arbitration against Centaurus Financial, Inc., related to investment recommendations by Marco Azizi (CRD# 2154719).
Marco Azizi has been registered with Centaurus Financial, Inc. in San Jose, California, since July 2016. Previously, he was registered with Summit Brokerage Services, Inc. in San Jose, California, from 2015 to 2016 and previously with J.P. Turner & Company, L.L.C. in San Jose, California, from 2002 to 2015.
The Erez Law client, who is a retired investor, alleges the following in the newly filed FINRA claim:
The broker recommended that the Erez Law client invest a significant amount of his retirement savings in GWG Holdings Inc. L Bonds, a speculative and illiquid private placement that was unsuitable given the investor’s advanced age, retirement status, risk aversion and inability to replace lost savings.
Although the L Bonds were marketed as and recommended by Centaurus Financial, Inc. and Marco Azizi to investors as a safe investment offering reliable income payments and a guaranteed return of principal upon redemption, in reality, the L Bonds were non-conventional, unrated, illiquid private placement investments that were inherently high risk.
The L Bonds were backed by life settlements. Life settlement investors such as GWG buy life insurance policies for more than their surrender value but less than the death benefit of the policies, which is known as a viatical settlement. In the case of L Bonds, GWG Holdings Inc. used the funds received from L Bond investors to purchase life insurance contracts that were listed on the secondary market and then used the payouts from those polices to repay investors in the L Bonds. The L Bonds sought to provide a high yield for the bondholder in exchange for bearing the risk that insurance policy premiums or benefits may not be paid.
Because the L Bonds were illiquid investments, there was no secondary public market for these offerings. As a result, investors’ ability to resell these bonds was extremely limited and/or non-existent. The illiquid nature of L Bonds meant that if the bond performed poorly, the bondholders were required to continue holding the bond until maturity, or pay a 6% redemption fee in order to sell it. Moreover, as a private placement these “bonds” were not rated by any of the major credit rating agencies and were therefore highly speculative in nature.
Erez Law alleges that one likely motivation for recommending the private placements is the large commissions, upward of 5%, they offer to the brokers who recommended this speculative and illiquid private placement.
It is alleged that Marco Azizi assured the client that the GWG Holdings Inc. L Bonds he recommended was a safe investment that would generate consistent income. The broker also allegedly failed to adequately disclose the enormous risks associated with investing in the GWG Holdings Inc. L Bonds.
According to the claim, the broker failed to adequately disclose the enormous degree of risk, including liquidity risk, associated with the GWG Holdings Inc. L Bonds he recommended and sold to the client. By failing to adequately disclose the enormous risks associated with his recommendation, the broker deprived the client of his right to make an informed decision about his investment.
Regrettably, now that GWG Holdings Inc. has, in fact, filed for bankruptcy, L Bond investors, including the Erez Law client, cannot expect the return of his capital invested.
Marco Azizi Customer Complaints
He has been the subject of six customer complaints between 2006 and 2023, three of which were denied, according to his CRD report:
August 2023. “The customer alleges that the Registered Representative recommended an unsuitable, high-risk, speculative and illiquid investment and breached his fiduciary duty. No specific dates for the alleged activity were identified in the Statement of Claim.” The customer is seeking $100,000.
February 2021. “During the period 2014 through 2020, the customer alleges that the Registered Representative recommended high commission, complex, risky and illiquid investments.” The customer sought $350,000 in damages, and the case was settled for $10,000.
September 2019. “During the period 2012 through 2014, the customers allege that the Registered Representative facilitated unsuitable, high-risk and illiquid investments.” The case was settled for $30,000. The complaint occurred while he was registered with J.P. Turner and Company (aka Cetera Financial Group) regarding real estate securities.
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 Marco Azizi’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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