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Zamansky LLC Investigates Centaurus Financial for Investment Fraud Over Sales By Its Lexington, SC Branch of Variable Interest Rate Structured Products

February 10, 2023 Active Cases & Investigations

On February 6, 2023, the Securities and Exchange Commission (“SEC”) announced that it settled regulatory charges of potential investment fraud against Centaurus Financial, Inc. (“Centaurus”) over sales of Variable Interest Rate Structured Products (“VRSPs”) at its Lexington, South Carolina branch office. The settlement involved Centaurus branch manager Ricky A. Mantei and registered representative, Atul Makharia.

What Happened? Investment Fraud Attorney Jake Zamansky Explains

The SEC alleged that, during 2016-2019, Makharia and seven other registered representatives at the Centaurus branch in Lexington, South Carolina made unsuitable recommendations of VRSPs to 94 retail customers. The customers were largely retirees who were over 65 years old and needed safe income investments that were liquid. The VRSPs were contrary to these customers’ financial needs and objectives as they ceased paying income after a few years and could lose principal. The SEC also alleged that Centaurus lacked a sufficient system of supervision to prevent unsuitable sales of VSRPs at its Lexington, South Carolina branch.

Our law firm is investigating possible investment fraud claims for Centaurus customers who purchased a variable interest rate structured product, or VSRP. The variable interest rate structured product takes the form of a 15-year note or bond issued by a well-known financial institution. The VSRP pays a guaranteed fixed interest rate in the first three years, after which the rate is variable. The serious risk to investors is that the VSRP ceases paying interest, and the VSRP cannot be sold because it has no liquid market or can only be sold at a loss. For these reasons, VSRPs are not suitable investments for retirees, elderly investors, conservative investors or other investors who wanted a safe and liquid income investment.

What an Investor Can Do

If you were a Centaurus customer of the Lexington, South Carolina branch or another branch who was sold a VRSP, or you want your account reviewed at no cost, please call investment fraud attorney Jake Zamansky at (212) 742-1414 or email jake@zamansky.com for a free evaluation of your potential legal rights.

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