Securities Lawyers Blog
According to BrokerCheck records financial advisor Robert Hoffmann (Hoffmann), formerly associated with Thurston, Springer, Miller, Herd & Titak, Inc. (Thurston, Springer), has been subject to two customer complaints, one regulatory action, and one tax lien. According to records kept by The Financial Industry Regulatory Authority (FINRA), in January 2017 a customer filed a complaint alleging that Hoffmann made unsuitable investments, unauthorized trading, and churning among other claims. The claim seeks $3,200,000 in damages and is currently pending.
In September 2017, FINRA sanctioned Hoffmann stated that Hoffmann consented to the sanctions and to the entry of findings that he willfully failed to amend his Form U4 to timely disclose an unsatisfied Internal Revenue Service (IRS) tax lien filed against him. In addition, there is one tax lien disclosed on Hoffmann’s report for $106,991 filed in December 2014. Tax liens and judgements are material information for an investor to consider for several reasons. A broker with large unpaid debts may be tempted to recommend high commission products and services to satisfy their personal debts. In addition, a broker’s inability to manage their own finances is material in a customer’s decision to retain the advisor’s services.
Brokers have a responsibility treat investors fairly which includes obligations such as making only suitable investments for the client. In order to make a suitable recommendation the broker must meet certain requirements. First, there must be reasonable basis for the recommendation the product or security based upon the broker’s investigation and due diligence into the investment’s properties including its benefits, risks, tax consequences, and other relevant factors. Second, the broker then must match the investment as being appropriate for the customer’s specific investment needs and objectives such as the client’s retirement status, long or short term goals, age, disability, income needs, or any other relevant factor.