John Hudnall, a former broker with BancWest Investment Services, Inc. (BancWest), submitted an Offer of Settlement to the Financial Industry Regulatory Authority (FINRA) in which he was barred from the securities industry amid findings that he recommended and sold a REIT investment to an 80 year old customer, which he split into two transactions in order to circumvent his firm’s supervisory review.
FINRA found that John Stuart Hudnall, of Pacifica, California, sold a $400,000 Wells Core Office Income REIT investment to an 80 year old customer. He then split it into two transactions, one of 40,000 and the other of $360,000, to avoid supervisory review of such a large transaction. Mr. Hudnall only submitted the $40,000 portion to his firm, and submitted the $360,000 portion directly to the REIT sponsor. Mr. Hudnall allegedly received a gross commission of $25,200 in connection with the $360,000 part of the REIT investment.
FINRA also found that Mr. Hudnall offered and paid monetary incentives to customers from his personal funds to get them to hold their fixed annuity contracts for at least a year before surrendering, which allowed Hudnall to retain his commissions. FINRA stated that Mr. Hudnall concealed this sales promotion from his member firm and masked the source of the funds paid to his customers, knowing that BancWest would not have approved had he disclosed it. Mr. Hudnall was barred from association with any FINRA member in any capacity.
Stockbrokers, registered representatives, and other financial industry professionals have been known to engage in many types of misconduct which are in violation of industry rules and procedures. In order to protect customers from such misconduct, FINRA rules require brokerage firms to establish and implement a reasonable supervisory system. The implementation of the rules requires supervisors to monitor its employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for losses flowing from the employees’ misconduct. As a result, account holders who have suffered losses stemming from unapproved securities transactions or other misconduct by their broker or registered representative can bring forth claims to recover damages against broker-dealers like, BancWest Investment Services, which have a duty to supervise its employees in order to prevent broker misconduct.
Have you suffered losses in your BancWest Investment Services account due to your stockbroker’s unapproved securities transactions or other misconduct? 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 BancWest Investment Services financial professionals for unauthorized and/or fraudulent misconduct.
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 40 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 post a comment, call (800) 732-2889, send Mr. Pearce an email at email@example.com, and/or visit our website at www.secatty.com for answers to any of your questions about this blog post and/or any related matter.