The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker William Hobby. According to his publicly available FINRA BrokerCheck report, William Hobby has been the subject of numerous customer disputes.

William Hobby was a Georgia based securities broker. He worked in the securities industry for twenty-five years. During his career, he was registered with five different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

  • Chatfield Dean & Co. (1992)
  • Citigroup Global Markets (1992-2008)
  • Morgan Stanley & Co. (2008-2009)
  • Morgan Stanley Smith Barney (2009-2012)
  • UBS Financial Services (2012-2018)

The Allegations

  • In January 2001, a customer alleged that William Hobby failed to advise him to sell all his WorldCom stock. This case was settled for $175,000 in damages.
  • In February 2001, a customer alleged that William Hobby recommended an unsuitable investment strategy and failed to disclose the risks associated with margin trading. This case was settled for $190,000 in damages.
  • Between May 2001 and October 2004, William Hobby became the subject of numerous customer complaints from individuals alleging that he improperly handled their accounts. These complaints were settled for a grand total of $4.4 million in damages.
  • In January 2018, customers alleged that William Hobby recommended unsuitable investments, over-concentrated their account in said high-risk investments, executed excessive transactions, and exercised discretion without the proper authorization. This case was settled for $350,000 in damages.
  • In May 2018, a customer’s lawyer alleged that they were placed in unsuitable securities that went against their conservative investment objectives and risk tolerance by William Hobby. The lawyer also alleged that William Hobby changed the customer’s risk profile to “aggressive” without the customer’s permission. This case was settled for $80,000 in damages.
  • In October 2018, a customer alleged that William Hobby should not have labeled her as an aggressive investor due to her age. This allegedly caused her to incur losses she could not afford. This case was settled for $24,000 in damages.
  • In September 2018, William Hobby was discharged from his position at UBS Financial Services. This termination followed allegations that he exercised discretion in a client’s account without written authorization from the customer or having the firm accept the account as discretionary.
  • In April 2019, an attorney, on behalf of an investor, alleged that William Hobby misrepresented the nature of unsuitable investments, changed the customer’s risk tolerance to aggressive without their authorization, and exercised discretion without written authority. This case was settled for $130,000 in damages.
  • In October 2019, an attorney, on behalf of an investor, alleged that William Hobby placed the customer in extremely risky, volatile, and unsuitable stocks. It was also alleged that Hobby over-concentrated the customer’s account in these highly unsuitable securities. This case is currently pending. The customer is seeking $480,162 in damages.

What Does This Mean?

There were multiple allegations levied against William Hobby, but the most prominent was that he ignored the suitability rule and over-concentrated his customers’ accounts in securities that were highly unsuitable for them. Brokers have an obligation to their customers to always act in their best financial interests. The most important aspect of this is making sure they (the customers) are invested in products that are suitable for them based on their previously acquired financial information. Brokers can analyze multiple different factors that are specific to their investors that help them (the broker) determine if a particular investment is suitable for them (the customer). These factors include; the customer’s investment objectives, risk tolerance, age, financial situation, annual income, and liquidity needs. Multiple customers of William Hobby alleged that he changed their account information to reflect that they were seeking a more aggressive investment strategy. Brokers who perpetrate an act like this often do so to avoid liability for investing customers in high risk securities against their wishes.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with William Hobby, please contact Oakes & Fosher for a free and private consultation. We work on a contingency basis, which means there are no fees charged unless we collect for you.