FINRA also alleged that during Hotton's on-the-record testimony, he falsely testified about numerous topics in response to FINRA's questions. Hotton also and allegedly provided FINRA with false statements and claims after authorities made a request for information and documents. Regarding Hotton's U4, the complaint alleges that he willfully failed to make any disclosure on his U4 of several legal actions against him, or the settlement of those actions - he failed to disclose that information even after the NASD instructed him to do so; he failed to timely amend his U4 to disclose the commencement of a federal action against him, or the temporary restraining order granted in that action; and when he finally amended his Form U4 to disclose the federal action, he falsely described the action as a business dispute between business partners.
Mr. Hotton also allegedly committed numerous acts of misconduct in clients' accounts and violated his customer-specific suitability obligations. FINRA's complaint states that Hotton executed hundreds of unauthorized trades in customers' accounts without his customers' knowledge, consent, or authorization. FINRA claims that Hotton's customers neither gave Hotton prior written authorization to exercise discretionary powers in their accounts, nor did they give Hotton verbal discretionary power. One of Hotton's customers specifically stated that he was not interested in risky or speculative trading, but Hutton still recommended investments that were contrary to the customer's investment objectives and financial situation. Some of the risky investments recommended were leveraged on inverse exchange traded funds or ETFs, which Hotton did not completely understand. In particular, Hotton did not understand or explain to his clients that the long-term return of a leveraged or inverse ETF can substantially deviate from the underlying index. Therefore, Hotton failed to satisfy the reasonable basis suitability requirement in connection with his investment recommendations.
Have you suffered losses in your Oppenheimer brokerage account? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Oppenheimer stockbrokers who engaged in stock brokerage misconduct and caused investors losses.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.