Clay Emerson Hoffman, of Brunswick, Georgia, a stockbroker formerly registered with Summit Brokerage Services, Inc., has been permanently barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon a FINRA Office of Hearing Officers Default Decision and Order containing findings that he obstructed an investigation into allegations that Hoffman churned and excessively traded in customer accounts, effected unauthorized and unsuitable transactions, and defrauded customers. Department of Enforcement v. Clay Emerson Hoffman, No. 2015045207702 (Mar. 31, 2017).
According to the Decision, Hoffman was sent two letters from FINRA in April of 2016, pursuant to Rule 8210, in which Hoffman was asked to provide documentation and information to FINRA personnel for purposes of FINRA’s investigation into his alleged wrongdoing. Apparently, Hoffman was called upon to detail his phone records, as well as his involvement in a customer’s investment account transactions. Hoffman reportedly failed to provide FINRA with a response to both requests, preventing FINRA from establishing whether he committed FINRA violations.
The Decision stated that FINRA Department of Enforcement ultimately filed a Complaint alleging that Hoffman’s failure to cooperate in the investigation was conduct violative of FINRA Rules 2010 and 8210. Hoffman evidently failed to respond to the Complaint, resulting in the Office of Hearing Officers’ issuance of a Default Decision and Order.
Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Hoffman was previously suspended by FINRA based upon consenting to findings that from June of 2013 to June of 2014, he exercised discretion in customer accounts despite lacking written authorization. Letter of Acceptance, Waiver and Consent, No. 2014041921901 (Feb. 9, 2016). According to the AWC, Hoffman’s activities, which consisted of entering trades on days in which he failed to communicate with customers, was neither authorized by customers nor his firm. FINRA found his conduct to be violative of FINRA Rules 2010 and NASD Rule 2510(b).
Additionally, Hoffman has been identified in fourteen additional customer initiated investment related disputes containing allegations of his misconduct while employed with Edward Jones, Summit Brokerage Services, and SunTrust Investment Services, Inc. Specifically, on October 4, 2006, a customer initiated investment related arbitration claim involving Hoffman’s conduct was settled for $3,525.00 in damages based upon allegations that he failed to deliver a prospectus to the customer, and did not apprise the customer regarding investments which were effected in the customer’s account.
Subsequently, on August 21, 2013, a customer initiated investment related written complaint regarding Hoffman’s activities was resolved for $80,000.00 in damages based upon allegations that Hoffman effected unauthorized corporate bond transactions in the customer’s account. On August 22, 2013, another customer initiated investment related written complaint involving Hoffman’s conduct was settled for $26,316.25 in damages based upon allegations that he effected unsuitable mutual fund transactions in the customer’s investment account.
Further, on September 11, 2013, a customer initiated investment related written complaint involving Hoffman’s activities was settled for $12,424.15 in damages based upon allegations that he effected the purchase of a variable annuity contract that was unsuitable for the customer, and omitted information concerning the policy’s surrender penalties. On September 17, 2013, another customer initiated investment related written complaint regarding Hoffman’s conduct was resolved for $4,873.18 in damages based upon allegations that Hoffman failed to explain the sales charges pertaining to the customer’s mutual fund investments, and placed a trade in the customer’s account without authorization.
Moreover, on January 23, 2014, a customer initiated investment related arbitration claim concerning Hoffman’s activities was resolved for $12,000.00 in damages based upon allegations that he effected mutual fund and equity transactions in the customer’s account that were not appropriate, and was liable for the customer’s dismal investment performance. Additionally, on February 5, 2014, a customer initiated investment related written complaint involving Hoffman’s conduct was settled for $23,000.00 in damages based upon allegations that Hoffman negligently handled the customer’s investment portfolio, and made unsuitable mutual fund recommendations to the customer.
Even further, on February 13, 2015, two customer initiated investment related civil actions regarding Hoffman’s activities were settled for a total of $120,000.00 in damages based upon allegations including unauthorized trading, breach of fiduciary duty, breach of contract, misrepresentation, conversion, and fraud. On December 12, 2015, another customer initiated investment related arbitration claim regarding Hoffman’s activities was resolved for $90,000.00 in damages based upon allegations that Hoffman made misrepresentations to the customer, placed trades in the customer’s account without authorization, and effected real estate security, mutual fund and equity transactions in the customer’s account which were not suitable.
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