The Financial Industry Regulatory Authority (FINRA) ordered Woodbury Financial to pay $1.1 million to a couple whose broker invested their money in an aircraft company, a military building in Indiana, variable annuities, and A-share mutual funds, among other unsuitable investments. A three-person arbitration panel last week found that Woodbury “permitted the execution of unsuitable transactions as a result of its failure to discharge its duty to supervise the former broker,” Robert H. Hoffman. Hoffman was barred from the industry in November 2017 after he refused to cooperate with FINRA. FINRA had been investigating him after claims surfaced that he made unsuitable recommendations and unauthorized transactions, excessively traded accounts and private securities transactions, and other things. Robert Hoffman currently has a $3.2 million complaint against him for suitability, unauthorized trading and churning, also known as excessive trading. These are particularly egregious violations of securities laws and internal firm rules.
A brokerage firm like Woodbury Financial must reasonably oversee its brokers in order to make sure that they do not violate securities laws or internal firm rules. If the brokerage firm does not do so, it may be liable for losses on a contingency fee basis. Woodbury Financial can be sued in the FINRA arbitration forum.
Robert Hayes Hoffman was previously registered with Robert W. Baird in Milwaukee, Wisconsin from October 1999 until January 2002, Northwestern Mutual Investment Services in Indianapolis, Indiana from October 1999 until May 2006, Woodbury Financial Services in Greenwood, Indiana from July 2006 until March 2017, and Thurston, Springer, Miller, Her & Titak in Indianapolis from April 2017 until May 2017. He has three customer disputes against him, two of which are pending, one financial pending matter, two regulatory matters and one judgment/lien, according to his online, FINRA BrokerCheck report. He has been permanently barred from the industry.
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