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Written by 6:16 pm Securities Fraud Articles

John Hudnall Barred from Securities Industry

Concerned about investment losses with John Hudnall?

According to FINRA, John Hudnall (CRD #4200298, Pacifica, California) has been permanently barred from the securities industry. Without admitting or denying the allegations, Hudnall consented to the sanction and to the entry of findings that he participated in an undisclosed and unapproved private securities transaction.

FINRA alleges that Hudnall recommended and sold a REIT investment to an elderly customer, which he split into two simultaneous transactions of $40,000 and $360,000. To circumvent his member firm’s supervisory review of such a large transaction of this kind, Hudnall allegedly executed the $360,000 portion of the REIT investment for the customer directly with the REIT sponsor and without first providing it to the firm for the requisite prior preapproval and prior written notice.

According to FINRA, the $400,000 REIT investment exceeded the firm’s supervisory thresholds and, if fully disclosed to the firm, would allegedly have triggered additional supervisory review and likely would have not been approved. Hudnall purportedly generated a gross commission of $25,200 in connection with the $360,000 portion of the REIT investment.

Additionally, FINRA alleges Hudnall made unapproved and undisclosed financial sales promotions to his firm’s customers. Hudnall allegedly offered and paid monetary incentives to customers from his own personal funds to incent them to hold their fixed annuity contracts for at least a year before surrendering them, which enabled Hudnall to retain commissions he would have lost had the customers surrendered before the year was up.

Hudnall allegedly made a promotional offer in which he promised to pay certain customers who purchased fixed annuities 1 percent annual interest if they held their fixed annuities for at least a year, when in fact this offer was not part of the fixed annuity product that he was selling. According to the complaint, Hudnall did not disclose to his customers that the interest payments he promised to them would be paid, and ultimately were paid, from his personal funds, rather than the annuity issuer.

According to FINRA, Hudnall also did not disclose to his firm either his promotional offer or his related payments to the customers. The findings also included that Hudnall purportedly provided false information at FINRA’s request.

For FINRA’s full finding see FINRA Case #2013036412601.

According to FINRA BrokerCheck, Hudnall was registered with U.S. Bancorp Investments in San Francisco, CA from 11/28/2012 – 03/26/2015. He has eight disclosures listed on his Broker Report including seven customer complaints.

Recovery of Investment Losses

Brokers have a fiduciary duty to make investment recommendations that are consistent with the clients net worth, investment experience and objectives. Risk tolerance, age, and liquidity needs also need to be considered. Furthermore, brokers are prohibited from engaging in underhanded businesses practice, like churning, that violate securities laws and regulations.

When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

If you suffered losses investing with John Hudnall, the attorneys of The White Law Group may be able to help you recover your losses. 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 with offices in Chicago, Illinois and Franklin, Tennessee.

For more information on The White Law Group, visit www.WhiteSecurtiesLaw.com.



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