Art Hoffman, of Ameriprise Financial, Allegedly Defrauded Clients in connection with Zima Digital Assets
The Securities and Exchange Commission has reportedly barred investment advisor Arthur “Art” Hoffman after charges that he defrauded clients in a purported cryptocurrency scheme that cost six investors total losses of more than $610,000.
The regulator reportedly filed civil charges on February 24. 2022 against Hoffman in a federal court in Phoenix, Arizona.
Hoffman allegedly failed to disclose to his clients conflicts of interest when he purportedly recommended an investment in a cryptocurrency trading company that had purportedly given him a loan solicit investors, according to the SEC’s complaint.
From May 2019 to December 2019, Hoffman allegedly recommended investments in Zima Global Ventures, which purported to use investor funds to trade cryptocurrencies and other digital assets for profit, according to the complaint.
Hoffman, who was reportedly registered with Ameriprise Financial at the time, allegedly recommended the investments to clients without the firm’s permission, according to the SEC.
According to the SEC, Hoffman purportedly told clients that the Zima offering would be highly profitable, promising a guarantee of 18.5% returns for the first year on new investments.
Hoffman reportedly borrowed at least $170,000 from Zima, although the company allegedly agreed to loan him up to $1.5 million at 2% interest per year, according to the complaint.
Further, the SEC said that Hoffman allegedly hid his activities by using a non-Ameriprise email address to communicate with clients about Zima, and also allegedly told clients not to tell Ameriprise that he was recommending the Zima investments to them.
According to his broker report, Hoffman was registered with Ameriprise Financial in Glendale, Arizona from 11/18/2016 – 05/13/2020. His broker report indicates he was allegedly fired for company policy violations related to “outside business activities and private securities transactions.”
What is “Selling Away”?
The White Law Group is investigating the liability that Hoffman’s former employer may have for his actions in regards to his outside business activities.
When a FINRA registered representative conducts business outside the scope of the brokerage firm where they are registered, the act can be considered “selling away.” Some brokers, looking to supplement their income, will go outside the traditional market, trying to find other products to push.
If a registered broker “sells away” from their firm, the brokerage firm may still be liable for negligent supervision of their broker representative and may be responsible for investment losses in a FINRA dispute resolution claim.
To learn more about the investigation, please see:
Potential Lawsuits to Recover Financial Losses
Broker dealers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor. Recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience.
If you are concerned about your investment with Arthur Hoffman and Zima Global Ventures and would like to speak with a securities attorney about your options, please call The White Law Group at 888-637-5510 for a free consultation.
For more information on The White Law Group and its representation of investors in FINRA arbitration claims, please visit https://www.whitesecuritieslaw.com
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.
Tags: Art Hoffman barred, Art Hoffman Zima, Arthur Hoffman investigation, Arthur Hoffman lawsuit, Zima Digital Assets losses, Zima global ventures class action, Zima global ventures complaints, Zima global ventures investigation, Zima global ventures lawsuit, Zima global ventures losses, Zima global ventures value Last modified: September 15, 2022