As a financial analyst and writer, I’ve seen my fair share of dispute cases, but when a broker like Cheryl Kitashima of Centaurus Financial garners not just one but multiple allegations of misconduct, it’s a wake-up call for investors everywhere. BrokerCheck, a tool I always encourage investors to check, depicts a concerning story for Kitashima, indicating a pattern of behavior that veers away from an investor’s best interests.
The latest client complaint filed against Kitashima captures attention not just for the sum involved — a hefty amount over $50,000 — but for the nature of the claim itself. The investor alleges Kitashima directed them towards an investment that was, frankly, poorly suited to their financial needs. The venture was marked by high risk and low liquidity, sparking a legal squabble over a suspected breach of fiduciary duty.
Spotting the Warning Signs
If you dig deeper, this isn’t Kitashima’s first rodeo with investor dissatisfaction. Her professional record is blemished by four other settled disputes, all echoing criticism of unsuitable investment recommendations. These previous cases paint a troubling picture, with combined settlements that reach way into six figures.
These allegations don’t just spell trouble for investors; they flout one of the industry’s critical standards: FINRA’s Rule 2111. It’s a rule I often stress in my writing, which mandates that brokers must tailor their investment suggestions to match an investor’s unique needs and financial objectives. Ignoring this guideline isn’t just a poor business practice; it’s potentially harmful to investors.
The Missteps Against FINRA Rule 2111
Violations of this rule may take many forms. They could involve reckless and frequent trading that doesn’t square with an investor’s aims — commonly known as “churning.” I’ve also seen instances where brokers push an imbalanced investment strategy, such as risking too much on a single stock or sector, which puts the investor at a higher risk. And let’s not forget recommending high-risk or hard-to-sell investments, notorious for incurring excessive fees.
Understanding the Fiduciary Relationship
Brokers, especially when acting as Registered Investment Advisers, hold a fiduciary duty to their clients. This means they’re legally bound to act with the clients’ best interests at heart. Nonetheless, whether as an RIA or regular broker, they should abide by regulations like FINRA Rule 2111 and Regulation Best Interest. It’s a point I always emphasize when advising clients who’ve faced investment losses.
Cheryl Kitashima’s Professional Background
Let’s take a brief look at Kitashima’s extensive career, spanning over four decades. She’s passed multiple professional exams, indicating a depth of knowledge in various finance areas. Currently, Kitashima is licensed in eight states and can act as an investment adviser in six. Her journey through the financial landscape has taken her through seven different firms, an itinerary that could imply versatility or, to a more skeptical observer, a complicated history.
If you, as an investor, have concerns regarding your interactions with Cheryl Kitashima or another advisor, don’t hesitate. Ensuring your portfolio aligns with your financial goals is critical, and reaching out to a specialized attorney well-versed in financial disputes might be your best move. Remember the wise words of Warren Buffett: “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
Securities fraud isn’t just a phrase; it’s a reality with serious implications for your financial well-being. Acting fast and with purpose can limit your losses and pave the way to regaining financial security. If you’re in such a predicament, confirm the advisor’s FINRA CRD number and seek guidance on how to proceed. Awareness and action are the investors’ best defense.
