SEC Bars Former Ameriprise Financial Investment Advisor
The Securities and Exchange Commission has barred Arthur S. Hoffman, a former investment adviser representative of Ameriprise Financial Services.
The Securities and Exchange Commission has barred Arthur S. Hoffman, a former investment adviser representative of Ameriprise Financial Services.
Hoffman began his career at Morgan Stanley DW Inc. in 1999, and was there for three years before he left for Merrill Lynch, Pierce, Fenner & Smith Inc. After working at Merrill Lynch for six years, Hoffman moved to Wedbush Securities Inc. and remained there for seven years before moving to Ameriprise.
The SEC’s complaint, filed February 2022, alleges that, from May 2019 to December 2019, Hoffman recommended investments in securities issued by Zima Global Ventures, LLC, which claimed to use investor funds to trade cryptocurrencies and other digital assets for profit.
According to the complaint, Hoffman recommended Zima’s securities to clients without disclosing conflicts of interest. Zima had agreed to lend Hoffman up to $1.5 million at 2% interest per year for soliciting investors, and in most cases, Hoffman already owed Zima tens of thousands of dollars.
The SEC alleges that at least one client asked Hoffman about his compensation from Zima, and Hoffman represented that his association with Ameriprise limited him to a one percent commission. Hoffman was prohibited by Ameriprise from recommending the investments to clients, and his true compensation totaled more than $170,000 in low-interest loans from Zima, which was more than 25% of the total amount invested by his clients.
Per the complaint, eight of Hoffman’s clients invested a total of more than $640,000 in Zima’s securities based on his recommendations. Zima 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.
Hoffman was permanently barred from acting as a broker or investment adviser, or otherwise associating with firms that sell securities or provide investment advice to the public by the SEC. He had been previously barred from acting as a broker or otherwise associating with a broker-dealer firm by the Financial Industry Regulatory Authority in May of 2020 for failing to provide information related to their investigation of the matter.
