Woodbury Financial Services, Inc. Ordered to Pay 1.091 Million for Failure to Supervise Former Broker Robert Hoffmann
Posted on Wednesday, July 11th, 2018 at 7:16 am
In June 2018, FINRA ordered Woodbury Financial Services, Inc. to pay the total sum of $1,091,575.21, which is comprised of $970,107.21 in compensatory damages and $121,468.00 in pre-judgment interest to two clients as a result of the firm’s failure to supervise former broker Robert Hoffmann (CRD# 4008798).
The causes of action included breach of fiduciary duty; negligence (failure to recommend suitable investments and violation of industry suitability and “Know Your Customer” rules); negligent misrepresentation (relating to Claimants’ investment in Hybrid Aircraft Company, Edgewood Property Group, LLC (a coal investment) and an Indiana military building); and fraud and deceit. The causes of action relate to Claimants’ investment in the aforementioned Hybrid Aircraft Company, Edgewood Property Group, LLC and the Indiana military building; in variable annuities issued by Lincoln National (Lincoln i4 Life) and AIG Polaris (Polaris Platinum III); and in unspecified A-share mutual funds. The FINRA arbitration hearing was conducted in San Diego, California.
The former clients alleged that Woodbury Financial Services, Inc. breached its fiduciary duty, was negligent and engaged in fraud and deceit in connection with selling them investments in several companies, variable annuities and unspecified A-share mutual funds. FINRA found that the firm permitted the execution of the unsuitable transactions as a result of its failure to supervise Hoffmann.
In January 2018, the Indiana Securities Division barred Hoffmann.
In November 2017, FINRA barred Hoffmann after he consented to the sanction and to the entry of findings that he refused to appear for FINRA-requested on-the-record testimony in connection with an investigation into allegations by a customer concerning unsuitable recommendations, unauthorized transactions, excessive trading, and private securities transactions.
In September 2017, FINRA sanctioned Glaser to $5,000 in civil and administrative penalties and fines and suspended him for three months after he 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.
Hoffmann was registered with Thurston, Springer, Miller, Herd & Titak, Inc. in Indianapolis, Indiana from April to May 2017, and previously with Woodbury Financial Services, Inc. in Greenwood, Indiana from 2006 to 2017. Hoffmann has been the subject of three customer complaints between 2014 and 2017, according to his CRD report:
November 2017. “Breach of fiduciary duty, suitability, misrepresentation selling away.” The case is currently pending.
January 2017. “Suitability; unauthorized trading; churning.” The customer is seeking $3,200,000 in damages and the case is currently pending.
August 2014. “The customer alleges the representative had her purchase an unsuitable variable annuity in May 2014 that also created tax consequences.” The case was settled for $47,574.63.
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, Woodbury Financial Services, Inc. may be liable for investment or other losses suffered by Hoffmann’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.