Carlos Francisco Otalvaro Audit (2023) – A Scam or Legit Broker?

Carlos Francisco Otalvaro  – and the firm that employs him or her – is regulated by the Financial Industry Regulatory Authority (FINRA).

If you are like most people, before you go out to dinner at a new restaurant, you probably take a quick look at the reviews. This makes sense; you are going to pay for an expensive dinner, and you need to be sure that you are getting a good value.

Yet, when choosing a financial advisor, many people fail to conduct this same level of due diligence. Before turning over access to your money, you need to be sure that you have found a financial advisor that you can trust. Here, our audit report, including details of allegations, complaints, and sanctions will help you decide whether or not to invest with Carlos Francisco Otalvaro.

BrokerComplaints.com is currently investigating allegations related to Carlos Francisco Otalvaro. We provide a free platform for investors to help them in their claims against negligent brokers and brokerage firms.

About Carlos Otalvaro

Carlos Francisco Otalvaro is an Investment Adviser. Carlos Francisco Otalvaro’s Central Registration Depository (CRD) number is 2294420 and the FINRA Profile can be found at – https://brokercheck.finra.org/individual/summary/2294420.

Click here to download a Detailed Audit Report for Carlos Francisco Otalvaro.

Carlos Francisco Otalvaro has previously been reprimanded and has disclosures and/or client dispute(s) listed at FINRA BrokerCheck.

Accusations and Disclosures

You can find below, a quick snapshot of Carlos Francisco Otalvaro’s regulatory actions, arbitrations, and complaints.

DISCLOSURE 1 – 

• Event Date: 11/30/2011
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA: 2010024837301
• DocketNumberAAO: 2010024837301
• Initiated By: FINRA
• Allegations: FINRA RULES 2010, 2150(A), 8210 – CARLOS FRANCISCO OTALVARO’S MEMBER FIRM RECEIVED A $12,586.75 CHECK FROM ITS CUSTOMER TO BE CREDITED TO AN ACCOUNT FOR HER BENEFIT. THE FIRM DEPOSITED THE CHECK INTO ITS ACCOUNT AT A BANK INSTEAD OF SENDING THE CHECK TO ITS CLEARING FIRM TO BE CREDITED TO AN ACCOUNT FOR THE CUSTOMER’S BENEFIT. THE CUSTOMER DEMANDED THAT OTALVARO, WHO CONTROLLED AND MAY STILL CONTROL THE FIRM’S FINANCES, THAT HER FUNDS BE RETURNED BUT OTALVARO FAILED TO DO SO AS OF JANUARY 2011; THEREBY MISUSING CUSTOMER FUNDS. OTALVARO FAILED TO RESPOND COMPLETELY TO FINRA REQUESTS TO PROVIDE DOCUMENTS REGARDING THE INVESTIGATION OF THE CUSTOMER’S FUNDS. OTALVARO’S FIRM RECEIVED $5,302 IN CASH TO BE DEPOSITED IN A FIRM CUSTOMER’S ACCOUNT BUT THE FIRM FAILED TO DO SO. THE FIRM AGREED TO RETURN THE FUNDS TO HIM BY WIRE. THE CUSTOMER SENT WIRE INSTRUCTIONS TO OTALVARO BUT OTALVARO, WHO CONTROLLED AND MAY STILL CONTROL THE FIRM’S FINANCES, FAILED TO RETURN THE FUNDS AS OF JANUARY 2011; THEREBY MISUSING CUSTOMER FUNDS.
• Resolution: Decision
• Sanction Details :: Sanctions: Bar (Permanent)
• Sanction Details :: Registration Capacities Affected: All Capacities
• Duration: Indefinite
• Start Date: 5/8/2013 Sanctions: Restitution
• Sanction Details :: Amount: $5,302.00
• Regulator Statement: HEARING PANEL DECISION RENDERED MARCH 21, 2013 WHEREIN OTALVARO IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR MISUSING CUSTOMER FUNDS IN VIOLATION OF FINRA RULES 2010 AND 2150(A) AND FOR FAILING TO RESPOND TO FINRA REQUESTS FOR INFORMATION AND DOCUMENTS IN VIOLATION OF FINRA RULES 2010 AND 8210. OTALVARO IS ALSO ORDERED TO PAY $5,302, WITH INTEREST, IN RESTITUTION TO A CUSTOMER. THE RESTITUTION SHALL BE DUE AND PAYABLE ON MAY 20, 2013. IF NO FURTHER ACTION, DECISION IS FINAL MAY 8, 2013.

DISCLOSURE 2 – 

• Event Date: 6/25/2010
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA: 2008011725901
• DocketNumberAAO: 2008011725901
• Initiated By: FINRA
• Allegations: ARTICLE V, SECTION 2 OF FINRA’S BY-LAWS, FINRA RULES 1122, 2010, ARTICLE V, SECTION 2 OF NASD’S BY-LAWS, NASD RULE 2110, INTERPRETATIVE MATERIAL 1000-1: OTALVARO WILLFULLY FAILED TO DISCLOSE AND TIMELY DISCLOSE MATERIAL FACTS ON HIS FORM U4. HE ALSO WILLFULLY FILED FALSE AND MISLEADING INFORMATION ON HIS FORM U4.
• Resolution: Decision
• Sanction Details :: Sanctions: Bar (Permanent)
• Sanction Details :: Registration Capacities Affected: Any Principal Capacity
• Start Date: 8/11/2011 Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
• Sanction Details :: Amount: $15,000.00 Sanctions: Monetary Penalty other than Fines
• Sanction Details :: Amount: $1,858.40 Sanctions: Suspension
• Sanction Details :: Registration Capacities Affected: ANY CAPACITY
• Duration: ONE YEAR
• Start Date: 8/15/2011
• End Date: 8/14/2012
• Regulator Statement: HEARING PANEL DECISION RENDERED JUNE 24, 2011 WHEREIN OTALVARO IS SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR ONE YEAR, BARRED FROM ACTING AS A PRINCIPAL FOR ANY FINRA MEMBER, AND FINED $15,000, FOR WILLFULLY FAILING TO DISCLOSE MATERIAL INFORMATION ON HIS FORM U4, WILLFULLY FAILING TO UPDATE HIS FORM U4 TO DISCLOSE MATERIAL INFORMATION WITHIN THE REQUIRED TIME FRAME, AND WILLFULLY FILING FORMS U4 THAT OMITTED MATERIAL INFORMATION, IN VIOLATION OF FINRA’S AND NASD’S BY-LAWS, NASD RULE 2110, INTERPRETATIVE MATERIAL-1000-1, AND FINRA RULES 1122 AND 2010. OTALVARO IS ALSO ORDERED TO PAY COSTS OF $1,858.40. THE DECISION INCLUDES A FINDING THAT OTALVARO WILLFULLY FAILED TO DISCLOSE A MATERIAL FACT ON A FORM U4, AND THAT UNDER SECTION 15(B)(4)(A) OF THE SECURITIES EXCHANGE ACT OF 1934 AND ARTICLE III, SECTION 4 OF THE FINRA BY-LAWS, THIS OMISSION MAKES HIM SUBJECT TO STATUTORY DISQUALIFICATION WITH RESPECT TO ASSOCIATION WITH A MEMBER. IF THIS DECISION BECOMES FINRA’S FINAL DISCIPLINARY ACTIONS, THE BAR PROHIBITING OTALVARO FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY PRINCIPAL CAPACITY SHALL BE EFFECTIVE IMMEDIATELY. THE SUSPENSION IS ALL CAPACITIES SHALL BECOME EFFECTIVE AUGUST 15, 2011 THROUGH AUGUST 14, 2012. THE FINE SHALL BE DUE AND PAYABLE UPON OTALVARO’S RETURN TO THE SECURITIES INDUSTRY. THE DECISION IS FINAL AUGUST 11, 2011.
• Broker Comment: MR. OTALVARO ERRONEOUSLY FILED LATE UPDATES TO HIS U4. ADDITIONALLY, SOME OF THE UPDATES WERE INCORRECTLY FILED DUE TO THE INCORRECT CHECK BOX SELECTION. FACTS DISCLOSED WERE CORRECT. CONTRARY TO THE ALLEGATIONS, MR. OTALVARO DID NOT WILLFULLY FILE FALSE OR MISLEADING INFORMATION ON IS FORM U4.

DISCLOSURE 3 – 

• Event Date: 4/16/2010
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA:
• Initiated By: FLORIDA OFFICE FINANCIAL REGULATION
• Allegations: OTALVARO WAS THE SUBJECT OF AN ADMINISTRATIVE ACTION BY THE STATE OF NEW JERSEY. HE ALSO FAILED TO ADEQUATELY SUPERVISE THE ACTIVITIES OF BROKERS WHO WORKED FOR HIS BROKER-DEALER. HE FURTHER FAILED TO FILE FINANCIAL STATEMENTS FOR HIS INVESTMENT ADVISER FIRM
• Resolution: Order
• Sanction Details :: Sanctions: Cease and Desist Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
• Sanction Details :: Amount: $166,500.00 Sanctions: Denial Sanctions: Revocation

DISCLOSURE 4 – 

• Event Date: 6/25/2004
• Disclosure Type: Regulatory
• Disclosure Resolution: Final
• Disclosure Detail :: DocketNumberFDA:
• Initiated By: NEW JERSEY BUREAU OF SECURITIES
• Allegations: OTALVARO FAILED TO REASONABLY SUPERVISE DONNAURO (CRD# 1952493) AND OTHER AGENTS BY NOT DETECTING AND PREVENTING THEIR UNAUTHORIZED SECURITIES TRANSACTIONS AND BUSINESS ACTIVITIES, AND THEIR RESULTING VIOLATIONS OF THE SECURITIES LAW.
• Resolution: Consent
• Sanction Details :: Sanctions: Bar (Permanent)
• Sanction Details :: Registration Capacities Affected: ALL CAPACITIES
• Sanctions: OTALVARO WAIVES ALL EXEMPTIONS TO REGISTRATION CONTAINED IN N.J.S.A. 49:3-50 SUBSECTION (A) PARAGRAPH 9,10,11 AND SUBSECTION (B). OTALVARO SHALL NOT DIRECTLY OR INDIRECTLY SUPERVISE ANY PERSONS REGISTERED OR WHO SHOULD BE REGISTERED WITH THE BUREAU AS AGENTS OR INVESTMENT ADVISER REPRESENTATIVES.
• Broker Comment: MR. DONNAURO CRD#1952493, A REGISTERED REP WITH WALLSTREET*E IN 2004, CONDUCTED UNAUTHORIZED AND NON-DISCLOSED SALE OF LIMITED PARTNERSHIPS. ALL OF THE FIRM’S SUPERVISORY PROCEDURES WERE FOLLOWED FOR THE SUPERVISION OF OBA. MR. DONNAURO DID NOT DISCLOSE THIS OBA. I WAS NAMED IN THE CASE AS THE PRINCIPAL IN CHARGE FOR THE SUPERVISION OF MR. DONNAURO BUT HAD NO CONTROL OF THE NON-DISCLOSED AND UNAUTHORIZED OBA.

According to a study prepared for the FINRA Investor Education Foundation, 80 percent of American investors report that they have been solicited to participate in a fraud scheme, while 11 percent of American investors report that they personally lost money as a result of fraud.

FINRA notes that the rate of investment fraud is most likely much higher than it is reported. This is because many victims of financial advisor scams are too ashamed to come forward. Further, the study also found that a significant number of investors do not know how to spot common red flags of investment fraud. The least you should do is share your experience with other potential victims of investment scams.

Previous Associations

Under federal securities law and securities industry regulations, registered investment firms have a legal duty to supervise their financial advisors. Section 15(b)(4)(E) of the Securities and Exchange Act of 1934 makes a securities firm liable for the conduct of representatives.

• WALLSTREET*E FINANCIAL SERVICES, INC. (CRD#: 43896) :: 1/14/1998 – 12/2/2010 :: CORAL GABLES, FL
• WINSTON RODGERS & OTALVARO, INC. (CRD#: 30970) :: 8/11/1994 – 2/2/1998 :: NEW YORK, NY

The duty to supervise securities representatives is a strong legal requirement. Registered investment firms must take many different steps to ensure that they are protecting their customers from irresponsible and criminal financial advisors.

Legit or Not?

Unfortunately, stockbroker fraud is more common than many investors would like to think. And yes, stockbrokers (including Carlos Francisco Otalvaro, but not limited to)  can (and do) steal money from their clients. While it’s rare that a broker will literally steal his client’s money (though that does happen), typically the “theft” of investment funds comes in the form of other fraudulent violations of securities law and FINRA rules which leads to significant investment losses.

Investors generally understand that there are risks associated with buying and selling securities. The market can go up, and the market can go down. No matter how skilled of an investor you are, there are always risks. With that being said, sometimes investment losses cannot be blamed on simple back luck.

There are 10 major types of complaints we receive against Investment Brokers –

• Outright Theft (Conversion of Funds)
• Unauthorized Trading
• Misrepresentation or Omission of Material Facts
• Excessive Trading (Churning)
• Lack of Diversification
• Unsuitable Investment Recommendations
• Failure to Disclose a Personal Conflict of Interest
• Front Running of Transactions
• Breakpoint Sale Violations
• Negligent Portfolio Management

Do your due diligence before investing. Public records are available for everybody to review and decide on the safest bet. 

How to Protect Yourself

We, as citizens, place a great deal of trust in the financial advisors who are tasked with helping us achieve and maintain financial security. Most of the time financial advisors and stockbrokers are honest folks who work diligently in their client’s best interests. However, on occasion financial advisors and the brokerage firms who employ them mess up and cause serious financial harm to their clients. Sometimes these losses are caused by simple negligence. Other times fraud or other serious misconduct is to blame.

Here are 5 signs that your broker needs to be reported –

• Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940, certain investment professionals, known as registered investment advisors (RIAs), owe fiduciary obligations to their customers. Your investment broker must always look out for your best interests. If you lost money because of your broker’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages.
• Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments, you should consider reporting them.
• Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission, the broker may be liable for the investor’s losses.
• Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification.
• Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning.
• Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading. You should consult with an experienced attorney.

Report Carlos Otalvaro

In order to prevail in an investment fraud lawsuit or FINRA arbitration cases, you must be able to assert a viable ‘cause of action’.

Carlos Francisco Otalvaro – and the firm that employs this broker – is regulated by the Financial Industry Regulatory Authority (FINRA). FINRA provides an online form to allow investors to file a formal complaint against their financial advisor, stockbroker, or brokerage firm.

Click here to go to FINRA’s Online Complaint Form →

This form will ask you for specific information related to your complaint. Be prepared by gathering the following:

• Name and symbol for the investment product in question.
• The CRD number (2294420) for the broker – Carlos Francisco Otalvaro
• Your complete contact information.

Remember, it is advised to report your broker to FINRA, only after you have exhausted all of your other remedies and carefully prepared a compelling complaint.  Once you file a complaint against your broker at FINRA, your case will be bound by FINRA’s rules and the arbitration panel’s eventual decision. The time clock will start, and your complaint will be served on your broker or broker-dealer.

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