The Securities and Exchange Commission named former LPL Financial broker Kerry Lee Hoffman alongside his friend Thomas V. Conwell, previously convicted of fraud for stealing money from investors, in a July 2019 complaint alleging that Hoffman and Conwell sold clients interests in GT Media, an unregistered securities offering, misled investors, and misappropriated investor funds while soliciting $3.3 million from 46 investors from 2015 through 2018.
Registered as a broker with LPL Financial from 2010 through 2018, Hoffman (CRD #1061740) allegedly misled clients through sales of GT Media stock and convertible promissory notes because Hoffman failed to disclose conflicts of interests, such as the fact that Hoffman had personally loaned $77,600 to GT Media, all while Hoffman purportedly knew that GT Media itself had little to no income or cash flow.
Hoffman purportedly recommended that GT Media hire friend and business associate Conwell, despite knowing that Conwell had previously been sued by the SEC and convicted of fraud charges, allegedly failing to disclose this information to GT Media.
Hoffman also allegedly failed to inform his investors, including several LPL Financial advisory clients, that GT Media was compensating him as an advisor, that GT media was using investor funds to repay Hoffman's loans, and that GT Media paid Hoffman commissions based on the amounts that clients invested in GT Media stock.
The complaint states that Conwell misappropriated $161,500 from the GT Media investors to pay his personal expenses.
LPL Financial permitted stockbroker Hoffman to resign in September 2018 following allegations that Hoffman held a private investment and acted as a consultant to a company without disclosing or obtaining prior approval from LPL.
Hoffman then briefly matriculated to Union Capital Company, where he was registered as a broker from September 2018 through July 3, 2019, just as the SEC filed its present complaint against Hoffman and Conwell.
If you have invested with ex-LPL Financial broker Kerry Lee Hoffman, associate Thomas Conwell, or with any broker or investment adviser who has solicited investments in an unregistered offering or other dubious securities product such as GT Media, and whose failure to disclose material information such as conflicts of interest or other facts that have proven harmful to your investments due to losses or the incurrence of excessive fees and commissions, please call our experienced FINRA arbitration attorneys at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.