Centaurus Financial Broker Patrick Michael Carroll Suspended by FINRA for Recommending 88 Unsuitable Variable Annuity Exchanges

• October 13, 2026
• Centaurus Financial

The Wolper Law Firm, P.A. is evaluating the allegations of investors who purchased or exchanged variable annuities through Patrick Michael Carroll (CRD# 2676119) of Centaurus Financial, Inc. in Cadillac, Michigan. On July 15, 2026, FINRA fined Carroll $10,000 and suspended him for 12 months. FINRA found that he recommended 88 unsuitable variable annuity exchanges. Centaurus Financial was censured, fined $475,000, and ordered to pay $634,488.56 in restitution to customers.

Broker’s History

According to his FINRA BrokerCheck report and SEC IAPD report, Carroll entered the industry in 1996. He has been registered with Centaurus Financial, Inc. in Cadillac, Michigan since September 2006 as a broker and since June 2010 as an investment adviser representative. He was previously registered with Legend Equities Corporation (1998–2006), American United Life Insurance Company (1996–2000), and AUL Equity Sales Corp. (1996–1997).

BrokerCheck reports five disclosure events: the FINRA action, three tax liens, and one customer dispute that settled for $4,999.99 in 2017.

FINRA Suspension (July 15, 2026)

Carroll and Centaurus consented to a Letter of Acceptance, Waiver and Consent (FINRA Case #2019064499301) without admitting or denying the findings. FINRA found that Carroll recommended, and Centaurus failed to reasonably supervise, 88 deferred variable annuity exchanges that Carroll lacked a reasonable basis to recommend.

According to FINRA, Carroll documented the surrender fees each customer paid and the bonuses the new contracts offered. He did not reasonably consider whether customers would benefit from the bonus share class, with its higher fees and new surrender period, after paying those surrender fees. The surrender fees totaled $561,409.01. Several customers also lost appreciated living-benefit riders.

FINRA further found that Centaurus:

• Gave principal reviewers no reasonable guidance on how surrender fees affect an exchange’s suitability
• Had no reasonably designed procedures to surveil representatives’ variable annuity exchange rates
• Failed to identify or investigate red flags that the transactions may have been unsuitable
• Lacked Reg BI procedures addressing variable annuity share classes and account-type recommendations; FINRA found that customers of two other representatives paid $73,079.55 more in fees than they would have in advisory shares

FINRA also found that Carroll willfully failed to disclose three federal tax liens on his Form U4 and inaccurately attested on four annual compliance questionnaires that he had no undisclosed liens. His suspension runs from August 5, 2026 through August 4, 2027.

Applicable FINRA Rules and Legal Standards

FINRA Rule 2330 governs recommendations of deferred variable annuities. A broker must have a reasonable basis to believe the customer has been informed of the product’s material features, including surrender charges. The broker must also believe the customer would benefit from features such as tax-deferred growth or living benefits. For an exchange, the broker must consider whether the customer would incur a surrender charge, be subject to a new surrender period, or lose existing benefits. The broker must also consider whether the customer exchanged an annuity within the preceding 36 months.

Since June 30, 2020, Regulation Best Interest has required recommendations to retail customers to be in their best interest. Before then, FINRA Rule 2111 required that recommendations be suitable. FINRA Rule 3110 requires firms to reasonably supervise their representatives, and Rule 2330 requires a principal to review and approve each deferred variable annuity transaction.

What This Means for Investors

Annuity exchanges often generate a new commission for the broker while resetting the customer’s surrender period. The customer may also give up valuable benefits. FINRA’s restitution order covers specific customers identified in the AWC. Other investors who exchanged variable annuities through Carroll may also have claims. Review your contract history for surrender charges, lost riders, or repeated exchanges. Under FINRA Rule 12206, a claim generally must be filed within six years of the event giving rise to it.

The Wolper Law Firm, P.A. represents investors throughout the country in securities arbitration and litigation, typically on a contingency fee basis. Matt Wolper, the firm’s managing principal, is a trial attorney who has handled more than 1,000 securities cases. If you exchanged annuities through Patrick Carroll or Centaurus Financial, contact us for a free consultation at 800.931.8452 or mwolper@wolperlawfirm.com.