Katherine Nishnic (CRD#: 2499553), a registered representative with Centaurus Financial, Inc. in Lexington, South Carolina, is currently involved in six pending customer complaints, according to her BrokerCheck report accessed on November 12, 2019. In each complaint, a client is seeking at least $100,000 in damages. Most recently, on September 11, 2019, a customer alleged that Katherine Nishnic “mismanaged and misrepresented unsuitable investments” from 2013 to 2019. The investments at issue were certificates of deposit.
FINRA warns investors about the dangers of high-yield certificates of deposit (CDs) in their Investor Alert entitled “High-Yield CD Offers Can Be Bait for High-Commission Investments.” The self-regulatory organization warns that “[s]ome promotional rates may be legitimate and designed to bring in new bank or credit union customers. But others are marketing ploys in which the CD is used as the bait to try to sell you a different, high-commission product, such as a fixed or equity-indexed annuity.” When CDs act as a gateway to complex securities products, investors can be left confused by this “bait and switch” tactic. Meanwhile, financial advisors may be reaping the benefits—in the form of large commissions.
Katherine Nishnic’s recent dispute is not the first time that she has come under fire for recommending certificates of deposit (CDs). Katherine Nishnic’s record of disclosures dates back to August of 2017. Among her six pending complaints, the investments at issue are corporate debt, real estate securities, and certificates of deposit (CDs), or some combination of these. Clients complained that she breached her fiduciary duty and recommended unsuitable investments.
What exactly does it mean to recommend unsuitable investments? FINRA’s Suitability Rule requires brokers to recommend investments that are suitable for each specific client, taking a three-pronged approach, examining 1) reasonable-basis suitability, 2) customer-specific suitability, and 3) quantitative suitability. If a broker allegedly fails to do that, clients may have a suitability claim against their brokers. When determining if an investment is suitable for you, brokers should take the following factors into account:
- Your age
- Your other investment holdings
- Your annual income
- Your total liquid net worth
- Your tax bracket
- How much investing experience you have
- Your investment objectives
- Your need for liquidity
- Your risk tolerance
Did your broker take these factors into account when recommending securities for you? If not, you may have a suitability claim. For more information about suitability, see our article “What is FINRA’s Suitability Rule?”
Over her 25-year career in the securities industry, Katherine Nishnic has worked for six broker-dealers. The Securities and Exchange Commission (SEC) terminated the registrations of two of her firms. Katherine Nishnic worked at Gunnallen from March 2008 to March 2010, and the firm’s SEC registration was terminated in June of the same year. After leaving Gunnallen, she moved to J.P. Turner, working there until June 2015. The SEC terminated the firm’s registration in April 2016.
In addition to Centaurus Financial, Inc., she has also worked for the following firms:
- P. Turner and Company, LLC (CRD#: 43177) of Lexington, South Carolina – SEC registration terminated on April 4, 2016
- Gunnallen Financial, Inc. (CRD #: 17609) of Lexington, South Carolina – SEC registration status terminated on June 11, 2010
- First Allied Securities, Inc. (CRD#: 32444) of Lexington, South Carolina
- E. Frey & Company, Inc. (CRD#: 23595) of Denver, Colorado – SEC registration status terminated on July 8, 2001
- Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD#: 7691) of New York, New York
If Katherine Nishnic was your broker or if you have questions about mismanagement or breach of fiduciary duty, you may benefit from consulting a securities attorney. Call (877) 238-4175 or email email@example.com for your free case consultation with the securities attorneys of Fitapelli Kurta.