Securities Lawyers Blog
The law offices of Gana Weinstein LLP are currently investigating claims that Broker Kerry Hoffman (Hoffman) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Hoffman was employed by Union Capital Company at the time of the activity. If you have been a victim of Hoffman’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a final customer complaint on January 11, 2021.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (‘Exchange Act’) and Section 203(f) of the Investment Advisers Act of 1940 (‘Advisers Act’) against Kerry L. Hoffman (‘Respondent’ or ‘Hoffman’).\<char_lb_r>\, \<char_lb_r>\, The Commission finds that from March 2015 through May 2018, Hoffman acted as a business and financial advisor to GT Media, Inc. (‘GT Media’), a company that operated under the name ‘Joy of Mom’ in Deerfield, Illinois. From February 2010 through September 2018, Hoffman also worked as a registered representative and an investment advisory representative in the Chicago, Illinois office of a broker-dealer and investment adviser (‘Adviser A’) dually registered with the Commission.\<char_lb_r>\, \<char_lb_r>\, On January 8, 2021, a final judgment was entered by consent against Hoffman, permanently enjoining him from future violations of Section 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (‘Securities Act’), Section 15(a) of the Exchange Act, and Section 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Thomas V. Conwell, et al., Civil Action Number 19-cv-4409, in the United States District Court for the Northern District of Illinois.\<char_lb_r>\, \<char_lb_r>\, The Commission’s complaint alleged that between August 2015 and January 2018, Hoffman, without informing Adviser A, sold GT Media stock and promissory notes to his advisory clients outside of their accounts at Adviser A. The complaint also alleged that Hoffman received compensation from GT Media and made several short-term loans to GT Media when the company had run out of money. It further alleged that the loans were repaid to Hoffman using funds that the company received from one of Hoffman’s advisory clients. According to the complaint, Hoffman failed to inform his advisory clients of his significant conflicts of interest, including that he was compensated as an advisor to GT Media, he was receiving commissions on their investments in GT Media stock, and that he had loaned money to GT Media. The complaint also alleged that Hoffman acted as an unregistered broker.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $75,000.00 on December 10, 2020.
Claimants, none of whom were ever customers of lpl, allege that advisor sold them an unregistered security. Activity period: 1/2016 to 5/2018 approximately.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $100,000.00 on May 29, 2020.
Claimants allege that their advisor recommended an unsuitable, non-regisgtered security. Activity period: 1/26/16 to 3/29/16.
Our legal team has a wealthy experience handling cases where advisors defraud clients by securing loans or selling securities through OBAs. The practice of selling unapproved investments, promoting fraudulent schemes to hide misused funds, and engaging in other deceptive acts is known in the industry as “selling away,” a major infraction of securities laws. In the industry the term selling away refers to when a financial advisor solicits investments in companies, promissory notes, or other securities that are not pre-approved by the broker’s affiliated firm. Sometimes those investments have some legitimacy but often times these types of investments can end up being Ponzi schemes or the advisor can be engaging in the conversion of funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. Firms are required to have protocols in place to oversee their brokers by tracking each advisor’s activities and public interactions. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Hoffman has been in the securities industry for more than 34 years. Hoffman has been registered as a Broker with Union Capital Company since 2018.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.