Erez Law is currently investigating broker Kerry Hoffman (CRD# 1061740) regarding his role in the GT Media scam.
In July 2019, the Securities and Exchange Commission (SEC) charged Thomas Conwell (CRD# 2095817) and Hoffman for fraudulently selling securities to retail investors. According to the SEC complaint, Conwell and Hoffman raised more than $3.3 million from approximately 46 investors through the sale of unregistered GT Media, Inc. securities, between July 2015 and July 2018.
According to the SEC complaint, Conwell was previously enjoined by the SEC and criminally convicted for stealing money from investors. The SEC’s complaint alleges that Conwell made numerous false representations to investors, including that two Fortune 500 companies were seeking to acquire GT Media and that GT Media would soon conduct an initial public offering. The SEC complaint also alleges that Conwell misappropriated $161,500 from investors, which he used to pay his personal expenses.
According to the complaint, Hoffman solicited his advisory clients to invest in GT Media securities without disclosing his financial conflicts of interest, including his compensation from GT Media and his short-term loans to GT Media that were repaid using investor funds.
The SEC’s complaint charged Conwell and Hoffman with violating the antifraud provisions.
Separately, the SEC instituted a settled cease-and-desist proceeding against GT Media. According to the SEC’s order, “between at least February 2013 and July 2018, GT Media raised approximately $4 million by offering and selling unregistered GT Media common stock to 55 investors.”
Hoffman was registered with four firms in the past nine years, and he was terminated from three of those brokerage firms. Most recently, Hoffman was registered with Union Capital Company in Chicago, Illinois from December 2018 to July 2019, when he was terminated regarding, “Failure to Fully Disclose.”
Hoffman was also registered with LPL Financial LLC in Mundelein, Illinois from 2007 to 2010, when he was terminated regarding, “Held a private investment and executed an agreement to act as a Consultant to a company without disclosing or obtaining prior approval from LPL. Assisted some family members and a few clients with making investments in same company.”
Hoffman was registered with Raymond James & Associates in Mishawaka, Indiana from 2007 to 2010.
Hoffman was registered with UBS Financial Services Inc. in Mishawaka, Indiana from February to December 2017, when he was terminated regarding, “an employee alleged that Mr. Hoffman entered trades without obtaining proper written authorization.”
Hoffman has been the subject of five customer complaints between 2000 and 2019, one of which was denied, according to his CRD report. The most recent complaint is regarding:
October 2019. “Claimants allege that their advisor recommended an unsuitable, non-registered security. December 2015 to November 2016.” The customer is seeking $170,000 in damages and the case is currently pending.
October 2019. “Claimants allege that their advisor recommended an unsuitable, non-registered security. Activity period – June 2015 to March 2017.” The customer is seeking $420,000 in damages and the case is currently pending.
October 2019. “Claimants allege that their advisor recommended an unsuitable, unregistered security and recommended the liquidation of an annuity. Activity period – April 2017 to July 2018.” The case is currently pending.
July 2019. “Claimants, who were never customers of lpl, allege the advisor (in december 2017) sold them a fraudulent, unregistered security.” The customer is seeking $550,000 in damages and the case is currently pending.
In April 2003, the SEC charged Conwell with six felony counts of mail fraud, five counts of making false statements to financial institutions, and one count of obstructing an investigation.
In July 2000, the SEC barred Conwell and permanently enjoined him for violations of the antifraud provisions of the Federal Securities Laws laws arising out of his misappropriations of nearly $800,000 of investor funds. The SEC alleged that Conwell induced 19 investors to invest with him for the purchase of various securities. Conwell was ordered to disgorge $781,612.71, plus prejudgment interest of $38,430.82, and a civil penalty of $80,000.
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, Union Capital Company may be liable for investment or other losses suffered by Hoffman’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.