Dec 9, 2024
DID JOSEPH MICHAEL TODD CAUSE YOU INVESTMENT LOSSES? Joseph Todd Formerly With Centaurus Financial, Inc. Has 18 Customer Complaints For Alleged Broker Misconduct Joseph Todd Customer Complaints and Reviews Number of Disclosures: Regulatory Events: 2, Civil Events: 1 Customer Disputes: 18 (including settlements, awards, and pending claims) Employment Termination: 1 Allegations Against Joseph Todd Mr. Todd’s termination and regulatory actions underscore serious compliance and ethical breaches. The permanent ban reflects the gravity of the allegations and their impact on investor trust We represented four clients of Joesph Michael Todd who filed arbitration claims against his employer, Centaurus Financial, Inc. A summary of the allegations made in the first FINRA arbitration we filed for investment losses realized by one of the four Claimants were as follows: I. INTRODUCTION Respondent Centaurus employed Joseph Michael Todd (hereafter referred to as either “Mike” or “Mr. Todd”) and held him out as registered representative, investment adviser, investment manager, financial adviser, and financial planner with special skills and expertise in the management of securities portfolios and financial, estate, retirement, and tax planning matters. Centaurus hired Mr. Todd after he was terminated by two prior broker-dealers for violations of industry rules, firm policies and procedures, including allegations of selling unapproved investments and misappropriation. It also permitted Mr. Todd to operate his Centaurus branch offices under the name “Todd Financial Services” as “a DBA for branding purposes.” The Respondent is being sued in its capacity as broker-dealer and investment adviser, investment portfolio manager, financial planner, and/or as an employer whose employees and agents, including, but not limited to, Mr. Todd, committed the acts and omissions which are the subject of this Statement of Claim. Claimant is a 62-year-old single woman back working 3 months after she had retired and discovered that her Centaurus’ stockbroker and investment advisor Mr. Todd did the following: 1) Stole $425,000 of her funds that were supposed to have been invested in safe, liquid, fixed income securities for her retirement security and income; 2) Acted in his own “best interest” instead of Claimant’s “best interest” in soliciting her to sell $420,000 of her investment grade municipal bonds and reinvesting the sales proceeds in illiquid and high-risk alternative investments; 3) Purchased $255,000 of high-risk preferred stocks and real estate investment trusts in her account without consulting her or any written discretionary authority; and 4) Misrepresented Claimant’s investment portfolio holdings in customized reports prepared by him at his Centaurus office to cover up the theft of her funds. Apparently, Claimant was not Mike’s only victim. On July 21, 2022, Mike’s employment with Centaurus was terminated for failing to cooperate with the broker-dealer’s investigation into allegations by others that he made unauthorized investments and/or absconded with their funds. Mr. Todd is under investigation by the Citrus County Sherriff’s Office and the United States Securities and Exchange Commission. He has surrendered what is left of his assets to an Assignee for Benefit of Creditors, the value of which is substantial less than the amount he owes to Claimant and other Centaurus clients. II. THE RELEVANT FACTS The Claimant is a high school graduate with a 2-year associates degree. She has had many jobs over the years in various industries. The Claimant thought she had retired from her last job in April 2022. Unfortunately, she has had to go back to work for the same company after she discovered theft, fraud, and other misconduct, which is the subject of this arbitration proceeding. The Claimant first met Mike in Homosassa, Florida in 2000. He was recently divorced with 2 children in his custody and lived across the street from her. They were neighbors and became close friends. The Claimant even helped take care of Mike’s house and children when needed. Similarly, Mike helped Claimant with some of her personal matters. They developed a relationship of trust, confidence, and reliance upon each other years before Claimant opened her Centaurus accounts with Mike as her stockbroker and investment advisor. The Claimant’s investment experience was primarily in the real estate market. Prior to opening her accounts with Centaurus, she bought, improved, and sold several real estate properties for a profit and used the proceeds to invest in more real estate and fixed income securities in furtherance of her retirement plan. Claimant also had a securities brokerage account at FMS Securities (“FMS”) in which she accumulated municipal and corporate bonds selected by her bond broker. The Claimant’s FMS bond broker would recommend bonds, discuss their ratings, maturities, yields, etc. and obtain her approval before any transaction was executed. The Claimant received paper account statements and confirmations on a regular basis to keep her advised about the transactions in her accounts and overall portfolio. In the late spring 2021, Claimant was close to retirement and needed a more qualified investment advisor/retirement planner than her bond broker to help plan her imminent retirement. She wanted to have a financial advisor who she could meet with face-to-face and discuss the retirement plan. Mike lived and maintained two Todd Financial Services offices within miles of her home and so, she reached out to him for advice. In June 2021, Claimant met with Mike and brought the May 2021 FMS Securities (“FMS”) account statements for her individual and IRA retirement accounts and began the ACAT transfer process of moving assets from FMS to Centaurus and its clearing broker Pershing & Co. (“Pershing”). After reviewing the account statements, Mike recommended that Claimant diversify her investment portfolio by investing in an American Equity Indexed Annuity tied to the S&P 500, which supposedly would provide principal protection and income. Mike instructed Claimant to write a check payable to Todd Financial Services in the amount of $90,000 for him to invest in the American Equity Indexed Annuity. Claimant noted the investment to be made by Mike on the check as “American Equity.” The assets transferred from FMS to Centaurus in pieces from late June through early July 2021. Shortly after all the assets transferred, Mike solicited Claimant...
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