Erez Law is currently investigating former Ameriprise Financial Services, LLC broker Arthur Hoffman (CRD# 3193754) regarding a fraudulent Ponzi scheme. He was registered with Ameriprise Financial Services, LLC in Glendale, Arizona from 2016 to 2020, when he was terminated regarding, “Registered Representative was terminated for company policy violations related to outside business activities and private securities transactions.”
In May 2020, FINRA barred Hoffman after he “consented to the sanction and to the entry of findings that he failed to provide documents and information requested by FINRA. The findings stated that FINRA opened an investigation in response to a disclosure filed by Hoffman’s member firm, which stated that he had been suspended for company policy violations related to outside business activities and private securities transactions.”
In February 2022, the Securities and Exchange Commission (SEC) filed civil charges against Arthur Hoffman alleging that he “breached his fiduciary to and defrauded his advisory clients by soliciting investments in Membership Units without disclosing his financial conflicts of interest and, in one instance, by misrepresenting the compensation he received from a company and falsely claiming that it was limited by his role as an adviser of his firm.”
It is alleged that he defrauded six clients of more than $610,000 in a cryptocurrency scheme. Arthur Hoffman also allegedly failed to disclose conflicts of interest to clients in regards to investment recommendations he made. Public records indicated that he received 10s of thousands of dollars from a cryptocurrency trading firm to solicit investors.
The SEC reported that he recommended investments in securities issued by Zima Global Ventures between May 2019 and December 2019. It is alleged that Zima Global Ventures used investor funds to trade cryptocurrencies and other digital assets for a profit.
The SEC also reported that he hid company-related activities from his firm, thus defrauding his clients and preventing Ameriprise Financial Services, LLC from monitoring and regulating activities that were not permitted.
The SEC also found the he “engaged in a scheme to defraud whereby he hid his company-related activities from the firm by using an email address outside of the firm’s supervision to communicate with clients about the company, providing false and misleading information to the firm about his outside business activities, providing false and misleading information to his firm about wire transfers from clients to the company, and persuading two clients not to discuss his involvement in recommending the Membership Units when the firm contacted those clients about their wire transfers.”
It is alleged that he told clients that the investments in Zima Global Ventures would be highly profitable with a guaranteed 18.5% return for the first year on new investments.
Public records indicated that the founders of Zima Global Ventures were arrested in February 2020 and charged with money laundering and money fraud.
Arthur Hoffman Customer Complaints
Arthur Hoffman has been the subject of four customer complaints between 2016 and 2021, according to his CRD report:
November 2021. “Claimant alleges former Ameriprise advisor recommended he invest $70k in an outside investment called Zima Digital Assets, LLC on January 25, 2020.” The customer is seeking $100,001 in damages.
April 2021. “Claimants allege their former advisor recommended an unsuitable outside investment in Zima Digital Assets.” The customer is seeking $358,183 in damages.
June 2020. “Claimants allege that beginning on about 4/23/19, respondent Hoffman recommended the claimants invest $172,688.03 in Zima Global Ventures, LLC a/k/a Zima Digital Assets (“Zima”), an alleged fraudulent Ponzi scheme promising unrealistic investment returns.” The customer sought $172,688.03 in damages and the case was settled for $49,500. The complaint took place while he was registered with Ameriprise Financial Services, LLC and was regarding outside investments.
February 2016. “The complaint includes claims for Arizona securities fraud; fraud in provision of investment advisory services, common law fraud and misrepresentation; breach of fiduciary duties; fraudulent concealment; negligent misrepresentation; negligence; negligent supervision; and document turnover and accounting.” The customer sought $1 million in damages and the case was settled for $329,500. The complaint was regarding leverage exchange-traded funds (ETFs) and it took place while Hoffman was registered with Wedbush Securities, Inc.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Ameriprise Financial Services, LLC may be liable for investment or other losses suffered by Arthur Hoffman’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.