Centaurus Broker Stuart Spivak Named in Multiple Customer Disputes

Investors rely on their brokers to act in their best interest, making recommendations that are honest, informed and appropriate. When that trust is broken, the consequences can be severe.

Stuart Jay Spivak (CRD#: 1883651), a broker registered with Centaurus Financial in Los Angeles, California, is facing increased scrutiny after being named in nine customer disputes over the course of his career. Many of the complaints allege unsuitable investment recommendations or misrepresentations, often tied to complex, high-risk securities.

In this article, we’ll review the recent arbitration case involving Spivak, explain the risks associated with the types of investments at issue and outline warning signs investors should watch for. Sonn Law Group is currently investigating claims and offers free consultations to affected individuals.

Recent Arbitration Involving High-Risk Real Estate Products

The most recent customer dispute against Stuart Spivak was filed in May 2024 (FINRA Case #24-00997). The claim alleged that Spivak recommended unsuitable and illiquid real estate investments, specifically DPPs and real estate securities, that were not aligned with the client’s financial goals or risk tolerance. The customer also cited a breach of fiduciary duty in the handling of their account.

The case was settled for $27,000, although Spivak did not contribute personally to the settlement. In his response to the allegations, Spivak denied any wrongdoing and stated that he was not involved in the negotiation or payment of the settlement.

Despite the resolution, the nature of the claims and the investment products involved are consistent with concerns raised in several of the other disputes tied to Spivak’s record.

Past Complaints: An Ongoing Pattern

Beyond the most recent arbitration, Stuart Spivak’s record includes several past complaints that further raise questions about his history of recommending complex financial products. In total, he has been named in nine customer disputes, many involving allegations of unsuitable or misrepresented investments.

• A 2004 case that resulted in a $386,188 arbitration settlement tied to allegations of fraud and misrepresentation in a variable life insurance policy; Spivak denied involvement in the sale and did not contribute to the settlement.
• A 2009 complaint involving a variable annuity purchase that settled for $4,500, paid entirely by Spivak.
• A 2011 claim alleging $121,753 in losses related to a real estate security; the case was closed without action.
• A 2013 complaint seeking $68,500 over alleged unauthorized trades and misrepresented REIT and annuity recommendations; the case was also closed without action.
• Several additional complaints involving annuity or REIT recommendations that were dismissed or denied, including one from 2011 and another from 2007.

A Look at Spivak’s Brokerage History and Qualifications

Stuart Spivak has worked in the securities industry for more than three decades. He is currently registered with Centaurus Financial, Inc. in Scottsdale, Arizona, where he has been affiliated since 2008. Prior to joining Centaurus, Spivak held roles at several other firms, including AXA Advisors, MetLife Securities, WS Griffith Securities and Phoenix Equity Planning Corporation, with registrations going back to 1989.

According to FINRA records, Spivak holds active licenses in 44 U.S. states and territories. He has passed multiple securities industry exams, including the Series 6 and Series 7, qualifying him as a General Securities Representative. However, he has not passed any principal or supervisory-level exams, meaning he has not been approved to act in a supervisory capacity within a brokerage firm.

The Risks of Alternative and Illiquid Investments

Direct participation programs (DPPs), non-traded real estate investment trusts (REITs) and other real estate securities are frequently pitched as high-yield or tax-advantaged opportunities. But for many investors, these products come with risks that aren’t always clear at the time of sale, especially when brokers fail to explain the drawbacks or recommend them to unsuitable clients.

Key concerns include:

• Illiquidity: These investments often can’t be sold easily and may have long lock-up periods, leaving investors unable to access their funds when needed.
• High Commissions and Fees: Brokers may earn substantial commissions on these sales — sometimes 7-10% or more — raising questions about motivation and suitability.
• Difficult Valuation: Without regular public pricing, investors may not know the true value of their holdings for years.
• Limited Transparency: Many of these products offer minimal ongoing disclosure, making it harder to assess performance or risk over time.

Given these risks, brokers must follow strict rules to ensure that alternative investments are only sold to investors who fully understand and can tolerate the potential downsides.

How the Rules Are Meant to Protect Investors

Several regulatory rules are designed to protect investors from inappropriate sales of high-risk or illiquid products:

• FINRA Rule 2111 (Suitability): Under this rule, brokers are required to have a reasonable basis for believing a recommendation is suitable based on the customer’s financial profile, goals and risk tolerance.
• FINRA Rule 2310 (DPPs): This rule imposes additional due diligence, disclosure and concentration limits for sales of direct participation programs and non-traded REITs.
• FINRA Rule 2231 (Account Statements): This rule requires firms to provide reliable valuations and disclosures for illiquid securities so that investors can make informed decisions based on accurate account information.

When brokers fail to meet these obligations, and investors suffer losses as a result, both the individual advisor and their firm may be held accountable through arbitration or legal action.

What Investors Should Watch For

Even one customer dispute can be a sign of trouble, especially when it involves complex or illiquid products. If you’ve worked with a broker and experienced any of the following red flags, it may be time to take a closer look at your account:

• You were told an investment was “safe,” “guaranteed” or came with “no downside.”
• You’re unable to access your money, or were not told about lock-up periods or liquidity restrictions.
• A large portion of your portfolio is tied up in a single type of product, such as annuities or non-traded REITs.
• You received unclear, inconsistent or incomplete documentation about your investments.
• Your broker avoids questions, stops responding or doesn’t provide straightforward explanations about performance or fees.
• You were surprised by unexpected fees, poor returns or received notice of legal actions tied to investments you didn’t fully understand.

If any of these signs sound familiar, you may benefit from having your portfolio reviewed by a securities attorney. In many cases, there are legal options available for recovering losses caused by unsuitable recommendations or misrepresentation.

Explore Your Legal Options With Sonn Law Group

If you believe you were misled or financially harmed by Stuart Spivak’s investment recommendations, you may have grounds for recovery. Sonn Law Group has over 30 years of experience representing investors nationwide in securities arbitration and litigation. Led by nationally recognized attorney Jeffrey Sonn, our firm has successfully helped clients recover millions in losses tied to broker misconduct and investment fraud.

We offer free, confidential consultations and work entirely on a contingency basis, meaning you won’t pay any legal fees unless we recover compensation for you.

Contact us today to schedule your case review and learn more about your rights..