After a long, checkered career, Clay Hoffman has been barred from the securities industry by the Financial Industry Regulatory Authority (FINRA). According to FINRA, Mr. Hoffman was first suspended and then barred from the securities industry for first failing to pay a fine he agreed to as part of a settlement, then for failing to cooperate with FINRA’s investigation into his alleged “unsuitable transactions, unauthorized transactions, excessive trading and fraud.”
First, some quick background:
Clay Hoffman has been in the securities industry for a long time, starting at Edward Jones in Florida, then moving to Merrill Lynch, SunTrust, and finally Summit Financial, all in the area of Brunswick, Georgia.
Throughout his career, several customers filed formal complaints and even lawsuits and arbitrations against him. There are around fifteen separate disclosures of unhappy investors in FINRA documents for Mr. Hoffman. Many of the customer claims included either allegations of unauthorized trading, misleading sales of variable annuities, or both!
SunTrust terminated Mr. Hoffman for putting his clients into investments that SunTrust believed were too risky for his clients’ investment objectives and risk tolerance, but has still paid thousands to unhappy investors who filed claims against the firm for Mr. Hoffman’s alleged misconduct.
Unauthorized trading can be very harmful to investors
When a financial advisor enters trades in a client’s account without authorization or permission, that’s unauthorized trading. Unauthorized trading can have a number of nasty effects on investors. Investors could take losses in investments they didn’t even know they owned! Investors can also end up stuck in investment portfolios that aren’t a good fit, and may be riskier or more speculative than an investor wants. Unauthorized trading can also result in unanticipated tax bills if it includes selling investments that have appreciated over the years.
Unauthorized trading can also allow a financial advisor to engage in trades that a firm’s compliance department would otherwise question. Most firms do not supervise discretionary and non-discretionary accounts the exact same way, because they generally owe clients better service under the law in discretionary accounts.
According to FINRA documents, Mr. Hoffman engaged in unauthorized trading several times, in multiple accounts, for different customers, over a long period of time, but a full accounting of investor losses has not yet been determined. What is clear is that Mr. Hoffman has been barred from the securities industry and his former employers, Summit Financial and SunTrust, are probably hoping that no more of his clients come forward, claiming losses.
If you have questions about investment losses, the securities litigation attorneys at Investor Defense Law LLP may be able to help, and offer free consultations. Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington State recover investment losses. We understand investment fraud and know how to sue investment advisors, brokerage firms, and financial advisors. To learn more, contact an investment fraud attorney at 800.487.4660.