Hilltop Securities Inc. (“Hilltop Securities”) (CRD#6220) has many different customer complaints filed by investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Hilltop Securities and its regulatory and customer complaints and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
Is Hilltop Securities Inc. in Trouble?
Yes, Hilltop Securities Inc. is experiencing ongoing regulatory troubles, though the firm continues to operate and maintains its public-facing operations. The company has faced significant regulatory actions and fines in both 2024 and into 2025, with a pattern of compliance failures dating back several years.
The most significant recent development not covered on the page you referenced is the August 2024 SEC enforcement action, where Hilltop Securities was fined $1.6 million for widespread recordkeeping violations (Top 5 SEC Enforcement Developments for August 2024 | Morrison Foerster). The SEC found that from at least August 2019 through 2024, HTS personnel, including senior managers and officers, routinely used personal devices for business communications through text messages and other unapproved platforms, failing to preserve these records as required by federal securities laws.
A BRIEF OVERVIEW OF SOME OF THE COMPLAINTS AND REGULATORY PROBLEMS HILLTOP SECURITIES HAS FACED OVER THE YEARS
- Overall regulatory record: 54 regulatory disclosures on the FINRA record, with Rex Securities Law Investment Fraud Attorney investigating the firm for lawsuits, arbitrations, and customer disputes. 2024 SEC action: Major enforcement action (details not specified in text). May 2024 Cboe Exchange fine: $170,000 penalty for approximately 58,656 instances of improper options position reporting between June 2020 and October 2022.
- Violations caused by coding issues and human error in reporting systems.
- July 2020 FINRA action: Censure and $475,000 fine for failing to establish and implement an AML compliance program reasonably designed to detect and report suspicious trading activity in low-priced securities.
- September 2019 sanctions: $250,000 fine for failing to establish procedures to ensure customers received required margin interest rate disclosures.
- Key supervisory weaknesses: As an independent broker-dealer, the firm operates with a business model that industry observers note can lead to less stringent oversight compared to traditional brokerage firms with on-site managers and compliance personnel
Can I Sue Hilltop Securities?
Yes, you can sue Hilltop Securities if you have lost money due to the misconduct of Hilltop Securities and/or its employees. However, in most cases, you likely signed an agreement that waived your right to sue in court and instead required you to pursue your claims through a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 45 years of direct experience handling FINRA arbitration cases. He knows how to not only sue Hilltop Securities in arbitration but also how to win those cases.
What is Hilltop Securities?
Hilltop Securities (CRD#6220) is a registered broker-dealer. It operates as a full-service independent broker-dealer, providing a range of financial products and services to individual investors and financial advisors.
As a registered broker-dealer, Hilltop Securities is subject to regulations and oversight by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is required to comply with industry standards and regulations to ensure the protection of its clients’ interests.
A failure to comply with industry standards by either its brokers or the firm itself can result in disciplinary actions, fines, or other penalties imposed by regulatory authorities.
Examples of Regulatory Problems and Complaints for Hilltop Securities
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise-type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with an on-site manager, compliance officer, and operational personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and, therefore, not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance, and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence, and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative, earning a commission.
There may be no one on-site to detect forgeries of clients’ signatures on documents or the placement of inaccurate information about a client’s investment objectives and financial condition, or to document the suitability of a particular investment recommendation. Oftentimes, there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
How to File an Official Complaint Against Hilltop Securities Advisor or One of Its Brokers with FINRA?
File a complaint against Hilltop Securities or one of its brokers by contacting a FINRA arbitration attorney immediately. Hilltop Securities has faced over 50 regulatory actions, including a $1.6 million SEC fine in 2024 for recordkeeping failures.
At the Law Offices of Robert Wayne Pearce, we help investors hold financial advisors accountable for misconduct, negligence, and breach of fiduciary duty. With over 45 years of FINRA arbitration experience, we are prepared to guide you through filing your complaint the right way, before it’s denied or ignored.
Related Read: Can You Sue Your Brokerage Firm?
Investment Losses? We Can Help
Discuss your legal options with an attorney at The Law Offices of Robert Wayne Pearce, P.A.
or, give us a ring at (800) 732-2889.
Consult With An Attorney Who Recovers Investment Losses Caused By Hilltop Securities Today!
The investment loss attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 45 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Hilltop Securities cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.