Joseph Michael Todd of Crystal River, Florida, a former Centaurus Financial Inc. stockbroker and an owner of Todd Financial Services LLC, is the subject of an enforcement action initiated by SEC in which the regulator is seeking sanctions against Todd based upon allegations that Todd misappropriated funds and committed fraud. SEC v. Joseph Michael Todd, Complaint No. 5:23-cv-00431 (July 12, 2023).
The Complaint accuses Todd and his companies, Todd Financial Services LLC (TFS) and TFS Insurance Services LLC (TFS Insurance), of cheating their customers. The customers, many of whom were seniors or individuals with disabilities, were allegedly deceived into giving at least $3,000,000.00 to Todd.
Todd purportedly tricked customers into making checks payable to him or his companies. He supposedly promised to invest their money in securities, but instead used it for his personal expenses like buying property, recreational activities, as well as adult entertainment.
To cover up his actions, Todd allegedly provided false account statements that showed that the customers’ money was invested as Todd had promised. He reportedly used a Ponzi-like scheme, using other customers’ money to pay at least one customer, falsely claiming they were returns from an investment.
SEC alleges Todd, TFS, and TFS Insurance violated Securities Act of 1933 and Securities Exchange Act of 1934. The SEC is seeking to recover the defrauded money, impose civil penalties and injunctions, and bar Todd from serving as an officer or director in any company. To resolve the charges without any admission of liability, Todd and his companies reportedly agreed to the proposed penalties, including the bar and fine.
This is not the first time that Todd has been the subject of a regulatory action concerning Todd’s conduct in the securities industry. Financial Industry Regulatory Authority (FINRA) Public Disclosure shows that Todd has been suspended from associating with any FINRA member in any capacity because Todd failed to comply with an arbitration award or settlement agreement or otherwise confirm compliance with FINRA Arbitration No. 22-01019 (April 25, 2023). On February 22, 2023, the claim involving Todd’s conduct resulted in the customer being awarded $60,000.00 in compensatory damages because Todd was held liable for sales practice violations. FINRA Arbitration No. 22-01019. The Statement of Claim alleged Todd converted funds, mismanaged investment accounts, made unsuitable recommendations, engaged in an undisclosed outside business activity, engaged in private securities transactions, committed fraud, and breached fiduciary duties in connection with the sale of illiquid securities and mortgage funds during the time that Todd was registered with Centaurus Financial Inc.
FINRA Public Disclosure also shows that Todd is referenced in eleven other customer initiated investment related disputes concerning Todd’s conduct while registered with securities broker dealers, including Invest Financial Corp. On April 11, 2001, a customer initiated investment related complaint involving Todd’s conduct was settled for $9,608.66 in damages based upon allegations that Todd made misrepresentations of material fact concerning surrender charges on life insurance products when Todd was registered with Invest Financial Corp.
Todd is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $152,400.00 in damages based upon allegations that Todd misappropriated funds. FINRA Arbitration No. 23-01502 (May 22, 2023). On June 2, 2023, a customer filed an investment related FINRA securities arbitration claim involving Todd’s conduct in which the customer requested compensation based upon allegations that Todd engaged in discretionary trading and made unsuitable recommendations. FINRA Arbitration No. 23-01553.
Todd is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $100,000.00 in damages based upon alleged misrepresentations concerning a non-profit. FINRA Arbitration No. 23-01829 (June 26, 2023). On June 28, 2023, a customer filed an investment related FINRA securities arbitration claim involving Todd’s conduct in which the customer requested $900,000.00 in damages based upon allegations that Todd engaged in unsuitable and unauthorized trading in real estate securities and equities when Todd was registered with Centaurus Financial Inc. FINRA Arbitration No. 23-01851.
Todd is also referenced in a customer initiated investment related FINRA securities arbitration claim in which the customer requested $100,001.00 in damages based upon allegations that Todd made misrepresentations of material fact in connection with the sale of alternative investments including corporate bonds and real estate securities. FINRA Arbitration No. 23-01932 (July 10, 2023).
Todd was registered with Centaurus Financial Inc. as a stockbroker from August 29, 2016, to July 21, 2022.
