Broker John Hoidas Suspended after 10 Customer Complaints
The Financial Industry Regulatory Authority (FINRA) has reportedly suspended financial advisor John Hoidas for 18 months and fined him $40,000 after numerous customers alleged unsuitable investment recommendations. FINRA is the self-regulator who oversees brokers and brokerage firms.
Between June 2019 and December 2021, seven of Hoidas’ customers reportedly filed arbitrations against his member firm, Uhlmann Price Securities alleging sales practice violations, including unsuitable investment recommendations. The firm reportedly settled with all seven customers. According to his broker report, the investments purportedly included, FS Investments, GPB Capital, and GPB Holdings II, among others.
According to FINRA’s findings, between January 6, 2017, and February 8, 2018, Hoidas allegedly made unsuitable recommendations in speculative alternative investments to three Uhlmann Price customers that were allegedly inconsistent with the customers’ investment profiles in violation of FINRA Rules 2111 and 2010.
Further, in July 2018, Hoidas purportedly borrowed $10,000 from one of his Uhlmann Price customers without providing prior written notice or gaining approval from his member firm, in violation of FINRA Rules 3240 and 2010. Hoidas also purportedly caused two member firms with which he was associated to maintain incomplete books and records in violation of FINRA Rules 4511 and 2010.
Between March 2017 to February 2020 Hoidas allegedly communicated with at least two of his customers through text messages using his personal phone regarding securities-related business, against firm rules. Separately, while registered through American Trust Investment Services, Hoidas reportedly entered into a commission-sharing agreement with another registered representative, which was not disclosed to, or approved by the firm.
The Problem with Unsuitable Investments – FINRA Rules Violations
The problem with unsuitable investments arises when brokers or financial advisors recommend or sell investments that are not suitable for their clients, potentially resulting in financial losses and harm to the investor. FINRA Rule 2111 requires a registered representative to have a reasonable basis to believe that a recommended transaction or investment strategy is suitable for a particular investor based on their individual financial situation, investment objectives, risk tolerance, and other factors. Here are some key issues with unsuitable investments:
- Incompatible with Investor’s Objectives and Risk Tolerance: Every investor has unique financial goals, investment objectives, and risk tolerance levels. An unsuitable investment may be one that does not align with these factors. For example, if an investor has a low-risk tolerance and seeks stable, conservative investments, recommending high-risk, speculative investments would be unsuitable and could lead to significant losses.
- Potential for Financial Losses: Unsuitable investments can expose investors to unnecessary risks and potential financial losses. If an investment does not match an investor’s financial situation or investment goals, it may fail to provide the expected returns or, worse, result in significant losses that can negatively impact their financial well-being.
- Lack of Diversification: Unsuitable investments may lack diversification, potentially concentrating the investor’s assets in a single investment or sector. This lack of diversification increases the vulnerability to market volatility and specific risks associated with the concentrated investment, amplifying potential losses.
- Breach of Fiduciary Duty: Financial advisors, particularly those acting as fiduciaries, have a legal and ethical obligation to act in their clients’ best interests. Recommending unsuitable investments can be seen as a breach of this fiduciary duty. It demonstrates a failure to prioritize the investor’s well-being and financial goals, potentially leading to legal disputes and claims for damages.
To protect themselves from unsuitable investments, investors should carefully assess the recommendations made by their financial advisors, ask questions, and ensure that investments align with their objectives and risk tolerance. In cases of suspected unsuitability, investors may seek recourse by filing a complaint with FINRA. If you are concerned about losses due to potentially unsuitable investment recommendations, the securities attorney at The White Law Group may be able to help you.
John Hoidas– FINRA BrokerCheck Profile
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
BrokerCheck provides investors with detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.
According to John Hoidas’ FINRA BrokerCheck report, he has ten customer complaints filed against him between 2019 and 2021. His record indicates he was registered with the following firms among others during his career:
04/24/2020 – 05/13/2021, AMERICAN TRUST INVESTMENT SERVICES, INC. (CRD#:3001), CHICAGO, IL,
B, 09/10/2013 – 02/20/2020, UHLMANN PRICE SECURITIES, LLC (CRD#:42854), SKOKIE, IL
B, 11/08/2010 – 09/09/2013, SPENCER TRASK VENTURES, INC. (CRD#:28373), EVANSTON, IL
If you have suffered losses investing with John Hoidas, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
For more information, please visit our website, whitesecuritieslaw.com.
Tags: AMERICAN TRUST INVESTMENT SERVICES, broker investigation, FINRA suspension, John Hoidas, Uhlmann Price, unsuitable investments Last modified: July 10, 2023