Home Alts News SEC Charges Former LPL Broker with Stealing $1.7 Million from Retail Investors

SEC Charges Former LPL Broker with Stealing $1.7 Million from Retail Investors

The Securities and Exchange Commission has charged Eric Hollifield of Winder, Georgia, with misappropriating at least $1.7 million from retail investors.

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The Securities and Exchange Commission has charged Eric Hollifield of Winder, Georgia, with misappropriating at least $1.7 million from two advisory clients and one brokerage customer and using the funds to pay for personal expenses, including the purchase of a home.

Between October 2016 and September 2021, Hollifield was a registered representative of LPL Financial and was a co-owner, principal, managing member, and an investment adviser representative of Hamilton Investment Counsel, which was also sanctioned by the SEC. LPL and Hamilton Investment Counsel both terminated Hollified for failing to disclose his outside business activities.

The SEC alleges that, beginning no later than January 2020, Hollifield transferred client assets to an outside business that he controlled, without the clients’ permission. He then directed a portion of those funds to his own accounts, which he used to pay personal expenses.

The SEC also claims that in August 2020, Hollifield used investor funds to purchase a 37-acre home in Winder, Georgia for approximately $1.7 million.

Specifically, the complaint states that Hollifield moved at least $425,000 of client funds through the outside business and used a portion of that money as a partial payment for the property. At that same time, he reportedly sold securities in a brokerage customer’s account and recommended that the customer transfer $1.24 million to another financial institution to accrue higher interest.

After receiving the customer’s permission for the transfer, Hollifield allegedly sent the money to a real estate closing agent to complete the purchase of his home, the SEC said.

The SEC’s complaint, filed in federal district court in Georgia, charges Hollifield with violating the antifraud provisions of various federal securities laws. The SEC seeks permanent injunctions and monetary relief.

According to BrokerCheck, in September 2021, he was barred from practicing in the state of Georgia and fined $500,000. The following month, he was barred by FINRA for refusing to participate in its investigation into the aforementioned allegations.

In separate settled administrative and cease-and-desist proceedings, the SEC charged Hamilton Investment Counsel LLC, the investment adviser Hollifield co-owned, and Jeffrey Kirkpatrick, its chief compliance officer, for failing to implement the firm’s policies and procedures by inadequately responding to numerous red flags surrounding Hollifield’s outside business activities.

Without admitting or denying the SEC’s findings, Hamilton Investment Counsel agreed to a censure, a cease-and-desist order, and a civil penalty of $150,000.

Similarly, Kirkpatrick agreed to a cease-and-desist order, a civil penalty of $15,000, and the imposition of a five-year limitation on his ability to act in a supervisory or compliance capacity.

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