Welcome to the Centaurus Fair Fund website

If you purchased or acquired Variable Rate Interest Structured products (the “Security”) from June 1, 2016, through July 31, 2019 (the “Relevant Period”), you must complete and submit a Certification Form on or before 11:59 p.m. Eastern Standard Time on February 27, 2025 (the “Certification Form Deadline”). If you choose to submit a Certification Form by mail, the completed Certification Form must be postmarked (or if not sent by U.S. Mail, received) by the Claims Bar Date.

BACKGROUND

On February 6, 2023, the SEC issued an order instituting administrative and Cease-And-Desist proceedings against Centaurus Financial, Inc. (“CFI”), Ricky A. Mantei (“Mantei”), and Atul Makharia (“Makharia”), (collectively, the “Respondents”). The SEC found that between June 2016 and July 2019 (the "Relevant Period"), Makharia and seven other registered representatives from CFI's Lexington, South Carolina branch office (collectively the "CFI RRs") recommended the sale of variable interest rate structured products (“VRSPs”) to ninety-four retail customers (“Specified Customers”) for whom such investments were unsuitable in light of each of the specific customers' financial situation and needs. The CFI RRs made these recommendations even though they knew, or reasonably should have, that the VRSP’s were unsuitable to these Specified Customers. CFI and Mantei also failed reasonably to supervise the CFI RRs. For his part, Mantei failed reasonably to follow CFI's then existing customer-specific suitability review procedures and review every proposed structured products transaction, including all VRSPs transactions. Additionally, from June 2016 to July 2019, CFI failed to make and keep certain required records relating to certain customer accounts. During this period, CFI electronically recorded certain customer accounts information required under the Exchange Act Rule 17a-3(a)(17), including the customer’s name, tax identification numbers, date of birth, employment status, annual income, net worth, and investment objectives. In some instances, CFI failed to maintain and preserve this information for at least six years and also failed to make and keep current records as required by the Exchange Act.

The Respondents submitted Offers of Settlement (the “Offers”) which the SEC accepted. The SEC ordered CFI to pay disgorgement of $4,876.00, prejudgment interest of $623.00 and a civil money penalty of $750,000.00; Mantei to pay disgorgement of $92,650.00, prejudgment interest of $11,842.00 and a civil money penalty of $206,000.00 and Makharia to pay a civil money penalty in the amount of $35,000.00, all in the total amount of $1,100,991.00. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, the SEC also created a Fair Fund for the disgorgement, prejudgment interest, and penalties (the “Fair Fund”) to be distributed to harmed investors.

The Centaurus Fair Fund is comprised of the $1,100,991.00 paid by the Respondents. The Fair Fund has been deposited in a SEC-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund.

On March 11, 2024, the SEC issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. On November 5, 2024, the SEC issued an order appointing Simpluris Inc. (“Simpluris”), as the Fund Administrator to oversee the administration and distribution of the Fair Fund and set the administrator’s bond amount.

On April 16, 2024, the SEC published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). On June 17, 2024, the SEC issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”).