John Holland (CRD#: 2538118), a registered representative with Summit Brokerage Services, Inc. in Charleston, West Virginia, is currently involved in a pending dispute in which a client alleges “negligence and breach of fiduciary duty,” according to his BrokerCheck report accessed on August 12, 2019. The claim was filed on May 24, 2019 and the client is requesting $1 million in damages.
What exactly is “breach of fiduciary duty”? A fiduciary must act in a way that benefits another party, not themselves. How does this apply to brokers and financial advisors? As part of the “duty of care,” brokers and financial advisors must be well-informed about the investment products they are recommending and should do their own due diligence. As part of the “duty of loyalty,” brokers and financial advisors are required to put their clients’ financial interests ahead of their own, avoiding financial conflicts.
John Holland previously worked for Securities Management & Research, Inc. (CRD#: 759), also of Charleston, West Virginia. On August 28, 2014, he was terminated from that position for “altering client documents.” In his broker comment, John Holland wrote, “This is relative to 2 clients. The dates were altered on original distribution forms to have funds sent to the address/account of record as requested by the clients. One client was out of the country and the distribution forms were lost in the mail. The other client was unable to meet with me to sign new forms for health reasons. Both the clients wanted me to change the dates because they needed the money quickly. I did not benefit from it in any way. I was trying to accommodate [sic] my clients urgent needs.” On the same day, because of the same incident, he was also terminated from his position at BFC Planning Inc.
On March 21, 2012, John Holland’s firm, Securities Management & Research, settled a customer dispute in which a client alleged that an investment in mutual funds was unsuitable for them, and that the nature of the investment was misrepresented to them. The customer originally sought $248,000 in damages, but the firm settled the case for $27,500. In his broker comment, John Holland wrote, “Client invested her money in the middle of the 2008 financial crisis. She wanted an immediate monthly distribution so I invested her money in the Franklin Income Fund that paid a monthly dividend. We set up systematic withdrawals. About the 10th month the client began taking additional distributions, 44 extra in total over the next 3 years. I reviewed her account with her every year and explained the money would not last forever at the rate she was taking extra distributions. In the 4th year she ran out of funds and complained it was invested improperly. The firm agreed to settle for a nominal amount and I did not contribute.”
A customer dispute settled on December 2, 2008 also involved mutual funds. A client alleged, “miscommunication concerning the allocation of money in the client’s Franklin Templeton Funds account.” The client originally requested $70,000 in damages, but the case was settled for $45,327.60. In his broker comment, John Holland wrote, “The client invested money during the financial crisis of 2008. We only invested half the money and held the other half to buy lower if the market dropped. As the market dropped I called her and we moved money into the market. Then Lehman Brotheres [sic] declared bankruptcy and the market fell dramatically. The client began to panic as they did not realize the funds were subject to some market risk. When we originally bought the funds we went through different hypothecial [sic] illustrations but nothing could prepare us for the market shock of 20008 [sic]. Firm agreed to settle and I did not contribute.”
If you’ve worked with John Holland and have questions about your investments, don’t hesitate to contact a securities attorney. Call (877) 238-4175 or email firstname.lastname@example.org to contact Marc Fitapelli and Jonathan Kurta, partners at Fitapelli Kurta LLC.