Securities Lawyers Blog
The investment lawyers of Gana Weinstein LLP are investigating the allegations made by The Financial Industry Regulatory Authority (FINRA) against barred broker Clay Hoffman. In June 2016, Hoffman was suspended by FINRA for his alleged failure to respond to FINRA’s request for information. Hoffman was later barred in November 2016 for his alleged failure to respond to multiple requests for documents and information related to an investigation.
Prior to the most recent suspension, Hoffman’s license as a broker was revoked and suspended, according to BrokerCheck. During May 2016, Hoffman alleged failed to pay a $5,000 fine for a previous case, which resulted in the revocation of his license. Additionally, Hoffman’s broker license was suspended during February 2016 due to the findings that allege that Hoffman engaged unauthorized business practices. Allegedly, Hoffman executed discretionary transactions in a customer’s account without any written authorization from the customer or firm.
In April 2015, a customer complaint was filed against Hoffman for alleged misrepresentation, unsuitability, and unauthorized trading. During his employment at SunTrust Investment and Summit Brokerage Services, Hoffman allegedly caused a loss for his client due to the misrepresentation of Mutual Funds. The alleged damages were $234,697.00 and the case settled at $90,000.
Hoffman entered the industry in 2001 and has since been subject to 19 disclosures. Before being barred, Hoffman has been employed at Summit Brokerage Firm Services Inc (May 2013 – March 2016), SunTrust Investment Services (October 2007 – April 2013), Merrill Lynch (June 2007 – October 2007), and Edward Jones (May 2001-June 2007).
The number of complaints against Hoffman are unusual compared to his peers. According to newsources, only about 7.3% of financial advisors have any type of disclosure event on their records among brokers employed from 2005 to 2015. Brokers must publicly disclose reportable events on their CRD customer complaints, IRS tax liens, judgments, investigations, and even criminal matters. However, studies have found that there are fraud hotspots such as certain parts of California, New York or Florida, where the rates of disclosure can reach 18% or higher. Moreover, according to the New York Times, BrokerCheck may be becoming increasing inaccurate and understate broker misconduct as studies have shown that 96.9% of broker requests to clean their records of complaints are granted.
At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.