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FINRA Orders Centaurus Financial to Pay $1.1 Million Over Variable Annuity Supervision Failures

Posted on August 13th, 2026 at 11:59 AM
FINRA Orders Centaurus Financial to Pay $1.1 Million Over Variable Annuity Supervision Failures

From the desk of Jim Eccleston at Ä¢¹½´«Ã½

The Financial Industry Regulatory Authority (FINRA) has ordered Centaurus Financial Inc. to pay more than $1.1 million after finding that the broker-dealer failed to reasonably supervise certain variable annuity sales and exchanges, including recommendations that triggered unnecessary costs to customers.

The settlement requires Centaurus to pay a $475,000 fine and approximately $634,000 in restitution. The firm accepted FINRA's findings in the Acceptance, Waiver and Consent ("AWC") without admitting or denying them, as reported by InvestmentNews.

According to FINRA, the firm's supervisory system and written supervisory procedures were not reasonably designed to oversee certain variable annuity purchases and exchanges between February 2016 and December 2025. The regulator found that Centaurus also failed to reasonably supervise certain recommendations involving variable annuity exchanges between February 2016 and December 2019.

FINRA also concluded that, from June 30, 2020, through December 31, 2025, the firm violated Regulation Best Interest (Reg BI) by failing to satisfy the rule's Conflict of Interest and Compliance Obligations. Reg BI requires broker-dealers to act in a retail customer's best interest when recommending securities transactions or investment strategies.

According to the settlement, representatives recommended that customers purchase B-share variable annuities and simultaneously enter advisory agreements under which the representatives managed the annuities' subaccounts. FINRA determined that the firm's supervisory controls did not adequately oversee those recommendations.

The enforcement action marks the second recent regulatory matter involving Centaurus and Regulation Best Interest. As InvestmentNews notes, the Securities and Exchange Commission fined the firm $160,000 last year for Reg BI compliance deficiencies related to recommendations involving GWG Holdings corporate bonds. GWG Holdings filed for bankruptcy in 2022 after numerous broker-dealers sold the company's L Bonds, and Centaurus ranked among the most significant sellers of those investments.

Ä¢¹½´«Ã½ LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra enforcement, variable annuities, failure to supervise, centaurus financial, securities regulation

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