Clay Emerson Hoffman, of Brunswick, Georgia, a stockbroker with Summit Brokerage Services, Inc., was fined $5,000.00 and suspended for fifteen days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity after consenting to findings that he engaged in unauthorized discretionary trading in a customer account. Letter of Acceptance, Waiver and Consent, No. 2014041921901 (Feb. 9, 2016).
According to the AWC, from June 2013 through June 2014, thirty transactions were effected in a customer’s account with Hoffman’s discretion. Apparently, Hoffman had effected these transactions on days which proceeded discussions with the firm’s client regarding purchases and investment strategies. Hoffman reportedly never obtained his customer’s written permission in order to engage in the discretionary trading.
The AWC additionally stated that Summit had not authorized the firm customer’s account as being discretionary. FINRA found that by engaging in the discretionary acts without the customer and firm’s consent, Hoffman had violated FINRA Rule 2010 and NASD Rule 2510(b).
Public disclosure records reveal that Hoffman has been subject to sixteen disclosure incidents. On July 17, 2006, Hoffman settled a customer dispute for $3,525.00 after the customer alleged that he failed to receive a prospectus and an adequate explanation of investments purchased. On October 15, 2008, Hoffman settled a customer dispute for $218,123.83 after the customers alleged dissatisfaction with bond performance and misrepresentation associated with such.
On May 21, 2012, Hoffman settled another customer dispute for $12,000.00 after customers alleged poor performance and inappropriate trading, in addition to other claims. On April 11, 2013, Suntrust Investment Services, Inc. discharged Hoffman amid allegations that account transactions effected by Hoffman had presented the firm with an intolerable amount of risk.
On April 24, 2013, Hoffman settled a customer dispute for $80,000.00 after the customer alleged to have been deprived of information in her account and claimed that purchases and sales in her account were unauthorized. On May 28, 2013, Hoffman again settled a customer dispute, where a customer was granted $12,424.15 after the client alleged non-disclosure of surrender penalties, suitability violations, and poor performance of an annuity.
On June 4, 2013, Hoffman settled a customer dispute for $4,873.18 after a client alleged that she was unaware of sales charges and trades effected until after they occurred. On July 10, 2013, Hoffman settled a customer dispute for $23,316.25 after a customer alleged that Hoffman effected unsuitable purchases of mutual funds for her. On October 1, 2013, Hoffman settled a customer dispute for $23,000.00 after the customer alleged breach of fiduciary duty and negligent investment advice.
Hoffman became subject to a pending customer dispute on June 27, 2014, where a customer alleged that Hoffman stole from the customer, lied and had tricked her. On December 22, 2014, Hoffman settled a customer dispute with a husband and wife, who each received $60,000.00 after asserting claims of fraud, conversion, breach of contract, unauthorized trading, misrepresentation, and breach of fiduciary duty. Hoffman settled a customer dispute for $90,000.00 on April 16, 2015, after a customer alleged unauthorized trading, misrepresentation, and losses that amounted from suitability violations.
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