Erez Law is currently investigating Texas broker Stephen Hoshimi (CRD# 1977772) regarding engaging in outside business activities, which is also known as selling away. Since 2009, Hoshimi has received 37 customer complaints that were settled for a total of more than $23 million.
Selling away is the inappropriate practice of a broker who sells or solicits the sale of securities not held or offered by the brokerage firm with which he is registered. Brokerage firms typically have lists of approved products that can be offered by their brokers to clients of the firm. These products have usually undergone due diligence screenings and have been identified as solid products for investment. When a broker sells away from the firm’s list of approved products, the broker runs the risk of selling something for which due diligence has not been completed. This may happen when the investments in question are private placements or other non-public investments.
Hoshimi was registered with Crescent Securities Group, Inc. in Dallas, Texas from December 2015 to September 2016, when he was terminated regarding, “Undisclosed outside business activity.” Hoshimi is not currently registered with any brokerage firm.” Hoshimi was previously registered with Capwest Securities, Inc. in Los Angeles, California from 2008 to 2010.
In April 2018, Hoshimi consented to the sanctions and to the entry of findings that he engaged in an outside business activity without providing prompt written notice of this activity to his member firm. According to Hoshimi’s BrokerCheck, “The findings stated that Hoshimi launched a website for “The Hoshimi Group” that he used to market services to registered investment advisers. This website, which constituted an outside business activity, advertised that Hoshimi was capable of bringing insurance solutions to insurance professionals. Hoshimi did not disclose this outside business activity to the firm until after he was asked to provide an explanation of the outside business activity during a FINRA examination. Hoshimi had previously reported an outside business activity for his fixed insurance business and had mistakenly assumed that The Hoshimi Group did not need to be reported as a result.” Hoshimi was sanctioned to a $5,000 civil and administrative penalty and was suspended for three months.
In February 2017, FINRA suspended Hoshimi for 24 days after he failed to respond to FINRA request for information.
Hoshimi has been the subject of 37 customer complaints between 2009 and 2013, according to his CRD report. All of the customer complaints were settled. Many of the complaints are regarding suitability, misrepresentation, and negligence, and were involved in recommending unsuitable real estate investment trusts (REITs), Medical Capital, Provident Sales, and Inland Western REITs.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Crescent Securities Group, Inc. may be liable for investment or other losses suffered by Hoshimi’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.