Is Centerpoint Securities Safe?
Centerpoint Securities is a direct-access brokerage that is a division of Precision Securities LLC, located in California. Precision Securities has been serving their clients in the financial industry since 2000 and they offer transaction clearing for traders and investors, a platform for active traders to utilize and short inventory for traders to borrow.
Precision Securities also goes by StreetOne Financial and both Centerpoint Securities, StreetOne Financial and Precision Securities are over 75% owned by Clear Street Holdings.
Centerpoint Securities is known for low commissions, fast executions and advanced routing options for their clients to choose from. Centerpoint Securities was most likely created to cater to the retail trader as Precision Securities LLC is a brokerage for institutional traders and clients with a significantly higher bankroll (minimum account balance $500,000).
The below allegations and fines were paid by Precision Securities, which is affiliated with Centerpoint Securities.
In March of 2024, the firm was accused by the Nasdaq Stock Market of manipulating markets and failing to maintain an efficient supervisory system that oversees the actions of its representatives to achieve compliance with the rules and regulations of the Nasdaq Stock Market. The firm was fined $80,000.
In July of 2021, the firm was investigated for suspicious activity and failing to develop and implement an anti-money laundering program. It was stated that they failed to monitor suspicious activity in its business model. The firm was fined $300,000.
In March of 2021, FINRA fined the firm $35,000 and the New York Stock Exchange fined them $35,000 for failing to limit their financial exposure by implementing market access controls.
In July of 2020, it was alleged that the firm failed to properly register two employees with FINRA who were trading securities. They were fined $12,500.
In March of 2015, the firm was fined $7,500 for performing trade transactions in Nebraska without being registered to do so.
Is Centerpoint Securities a Scam?
Centerpoint Securities offers a free 14-day trial with clients who are looking to get a taste of the what firm offers without making a full commitment. The team at Centerpoint Securities and Precision Securities LLC have been in the industry for over 20 years. They include many disclosures on their website regarding Day Trading Risks and Margin Risk so that their clients are aware of the risks that are involved in conducting business with them.
Centerpoint Securities is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). Although we do not know whether the fined actions were taking place directly at Centerpoint Securities or if they were occurring at Precision Securities, they have been in the industry for over 20 years and have relationships with top financial firms in the investing and trading space, making it very doubtful that they are a scam.
Is Centerpoint Securities a Safe and Legitimate firm?
Centerpoint Securities is registered with the SEC and is not suspended with any regulators. They conduct 7 types of businesses and are registered as a broker-dealer. The 7 types of businesses that they conduct are as follows: broker retailing corporate securities, broker selling debt securities, put and call dealer (option writer), broker selling tax shelters, arranging transactions in listed securities, trading securities for their own account and private placements of securities.
Centerpoint performs business in the below states in the United States of America. They do allow foreign accounts but they require an application to be filled out. They have a blocked jurisdiction list where individuals of that country cannot open an account with Centerpoint.
They refer customers to other brokers that they have agreements with which include Clear Street LLC, Vision Financial Markets LLC, Electronic Transaction Clearing, Inc. and Wedbush Securities Inc. These agreements were made for the clearing and execution of securities trades and transactions as well as for the firms that Precision has the agreement with to provide cash and margin accounts for customers. Many of these firms like Clear Street, ETC and Wedbush are very large companies in the financial industry.
Is Centerpoint Securities FDIC/SIPC insured?
Centerpoint Securities is SIPC insured. It does not act as a bank and therefore is not FDIC insured.
Is Centerpoint Securities Free?
Centerpoint Securities is not free. When trading or investing with Centerpoint, a customer is charged commission fees, regulatory fees, short locate fees and other platform fees.
Centerpoint Securities Rating and Complaints
Centerpoint Securities is not present on the BBB. It was rated 4.5 out of 5 by Benzinga, which is a popular, widely used stock-market news company. Trading tools, customer service, user benefits, and user experience are all rated 4.5 or greater on Benzinga and its pricing rating equaled 4/5. Other online ratings stated that the fees are quite high compared to other brokers.
Most customers are fairly happy with Centerpoint Securities and the only negative reviews are in regard to pricing of the platform.
Is Centerpoint Securities Safe Conclusion
Centerpoint Securities is an established broker that has been in the industry for over 20 years and has relationships with large, well-known industry titans. Most customers are satisfied with the service that Centerpoint provides and it is stated that they have a high quality short-locate tool and an inventory of short-locates better than most companies in the financial industry which is most likely due to their relationships with other large companies.
Their FINRA mentions many allegations made against Precision Securities that resulted in them having to pay fines. As a larger company in the financial industry, it may be difficult to monitor every representative that is working for the company and prevent these allegations from occurring. Despite this, Precision Securities has a quality of processes that must be upkept since they are a widely-used company for traders and investors.
When looking under the hood of Centerpoint Securities and Precision Securities, there is obviously individuals and processes at the company that are not performing at the highest level possible. This may or may not affect the retail trader that opens an account with the company, but it is important to be aware of companies that have some allegations made against them in the past for not following processes.
Overall, Centerpoint Securities gets the job done for retail traders, but when researching other brokers, keep in mind that they have been fined over $400,000 since 2015 for not following the rules and regulations of FINRA, the NYSE and the Nasdaq Stock Exchange.
Updated on 10/7/2024.
Daniel Colantonio is a writer and entrepreneur from Long Island, New York. He has an IT and real estate background and he enjoys traveling, exercising and spending time with his family in his free time.
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