SEC Reportedly Charges Arthur Hoffman with Conflicts of Interest with Investment Recommendations
According to a litigation release, the Securities and Exchange Commission announced on February 24 it has allegedly charged Arthur S. Hoffman with fraud in connection with recommendations he made to clients while working as an investment advisor with Ameriprise Financial Services.
According to the SEC’s complaint, from May 2019 to December 2019, Hoffman allegedly recommended investments in Zima Global Ventures, LLC, which purported to use investor funds to trade cryptocurrencies and other digital assets for profit.
Hoffman purportedly recommended Zima’s securities to clients without disclosing conflicts of interest including, that Zima had allegedly agreed to lend Hoffman up to $1.5 million at two-percent interest per year for soliciting investors, and that, Hoffman was purportedly already in debt to Zima for close to $170,000.
Hoffman allegedly lied to one client about his commissions, claiming that Ameriprise limited him to one percent commission, but in actuality Ameriprise’s rules did not allow Hoffman to recommend this investment to his clients at all, according to the complaint.
The SEC further alleges that Hoffman tried to hide his conduct from Ameriprise, by using a non-Ameriprise email address to communicate with clients about their investment with Zima Global Ventures, which was another alleged rules violation. Hoffman also reportedly told two clients not to tell Ameriprise that Hoffman recommended Zima’s securities to them when Ameriprise contacted the clients about their investments.
According to the SEC, eight of Hoffman’s clients invested a total of more than $640,000 in Zima’s securities based on his recommendations. Zima reportedly collapsed in January 2020 when its principals were arrested and charged by the federal criminal authorities with conspiracy to commit wire fraud and money laundering, leaving six of Hoffman’s clients with total losses of more than $610,000.
According to Hoffman’s FINRA BrokerCheck report, he has three customer complaints filed against him in connection with Zima Global Ventures (also known as Zima Digital Assets), “an alleged fraudulent Ponzi scheme promising unrealistic investment returns.” Hoffman reportedly filed for personal bankruptcy in May 2020. FINRA has reportedly barred Hoffman from working in the securities industry.
According to his broker report, Hoffman was reportedly affiliated with the following firms, among others, during his career in the securities industry:
11/18/2016 – 05/13/2020, AMERIPRISE FINANCIAL SERVICES, LLC (CRD#:6363), Glendale, AZ,
05/07/2009 – 11/22/2016, WEDBUSH SECURITIES INC. (CRD#:877), GLENDALE, AZ
01/03/2003 – 05/04/2009, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (CRD#:7691), SUN CITY, AZ
When brokers violate securities laws, such as making unauthorized transactions or unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
To learn more please see: (Arthur Hoffman (Art Hoffman), Broker Investigation)
If you have suffered losses investing with Arthur Hoffman, the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The foregoing information, which is all publicly available, is being provided by The White Law Group.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington. For more information, please visit our website, www.whitesecuritieslaw.com.
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