Michael Todd, of Crystal River, Florida, has been fired by Centaurus Financial, Inc. after failing to cooperate with an investigation into a customer’s complaint, according to his FINRA BrokerCheck Report.

Michael Todd Customer Complaint Alleges Selling Away

On May 27, 2022, one of Michael Todd’s customers filed a Financial Industry Regulatory Authority (“FINRA”) arbitration claim alleging that Todd misrepresented a mortgage fund investment which turned out to be illiquid, high risk, and unsuitable and sold without Centaurus’s knowledge or approval. The customer alleged $100,000 in damages.

Following the complaint, Centaurus launched an investigation into the customer’s allegations, investigating whether Todd violated firm policy and/or industry rules by selling away and receiving customer funds. According to Todd’s BrokerCheck report, Todd failed to cooperate with Centaurus’s ongoing investigation, resulting in his dismissal.

FINRA rules 3280 and 2010, prohibit “selling away” (i.e., the sale of securities not offered or held by the brokerage firm with which the broker is associated) and require FINRA members to observe high standards of commercial honor and just and equitable principles of trade.

Michael Todd Customer Complaint History

Michael Todd has been the subject of two other customer complaints. The first, brought while Todd was employed with Invest Financial Corp., alleged that Michael Todd misrepresented the surrender period of an annuity and failed to provide a contract in a timely fashion. That claim was settled for the full amount of damages sought by the customer.

Another customer complaint, made in 2008 while Mr. Todd was employed by Edward Jones, alleged that Mr. Todd presented the client with outside investments which would generate monthly income. Edward Jones denied the claim, alleging that the customer lost money through excessive withdrawals from her account and FINRA took no further action.

Centaurus Financial, Michael Todd, and GWG L Bonds

The Frankowski Firm is investigating potential claims against Michael Todd and Centaurus Financial, Inc. for unsuitable sales of GWG L Bonds. Centaurus Financial is believed to be in the network of firms which sold the L Bonds.

As high-yield debt instruments which financed the purchase of life insurance policies on the secondary market, L Bonds were highly speculative and highly illiquid – meaning there was no way for the bondholders to resell them other than selling them back to GWG Holdings at a redemption fee.

The high risks and illiquidity of these bonds would have made them suitable only for a narrow range of investors who could afford to take on high risks and who did not need access to their cash. These features been known to investment advisors even before the L Bonds collapsed and the advisors were obligated to explain the risks to their clients and to only recommend the L Bonds to investors for whom high risk and illiquidity was suitable. Unfortunately, however, many investors used their retirement savings to buy L bonds on the advice of their stockbroker.

Investors who were sold GWG L Bonds based on incomplete or misleading information, or who needed liquid and relatively safe investments, may have legal recourse to recoup their losses.

Financial Advisors are obligated to understand the risks of investments they recommend to their clients and to disclose material risks to their customers.

If your stockbroker / financial advisor misled you to believe that the GWG L Bonds were a safe, low-risk, or guaranteed investment, or if your stockbroker / financial advisor failed to explain the risks of GWG L Bonds when recommending them to you, you may be eligible to receive compensation for your GWG L Bonds losses.

Likewise, if you were an investor who needed liquid and/or low to moderate risk investments, you may be eligible to recover your damages from the investment advisor and/or advisory firm who solicited your purchase of the GWG L Bonds.