KERRY HOFFMAN, THOMAS CONWELL Losses?

KERRY HOFFMAN, THOMAS CONWELL Named In SEC Complaint

The Securities and Exchange Commission (“SEC”) brought charges against prior LPL Financial LLC securities broker Kerry Hoffman (CRD#: 1061740, Mundelein, Illinois) and barred-broker Thomas Conwell (CRD#: 2095817, Fort Meyers, Florida). Specifically, the agency filed Civil Action #: 19-cv-4409 on July 1, 2019, claiming Hoffman and Conwell violated federal securities laws including Securities Act of 1933, Securities Exchange Act of 1934 and Investment Advisers Act of 1940. Allegedly, Hoffman and Conwell sold 46 investors $3,300,000 in GT Media Inc. securities via an unregistered securities offering. Here is a summary of the SEC’s Complaint.

GT Media Inc. Hires Hoffman To Sell Its Stock In Return For Compensation

Supposedly, GT Media Inc., a thinly capitalized Illinois Corporation doing business as “Joy of Mom,” created content about “mothers’ lifestyles.” GT Media allegedly hired Kerry Hoffman to be its advisor in 2015 – a time Hoffman worked for LPL Financial. The securities broker purportedly persuaded GT Media to hire Conwell to sell GT Media’s stock on behalf of the company. Significantly, Conwell is a barred securities broker with a criminal record including theft of investor funds.

SEC Alleges Conwell Misrepresented Investments And Misappropriated Investors’ Funds

Allegedly, Thomas Conwell made $221,900 in commissions from GT Media by selling 41 investors $2,500,000 in GT Media stock. Conwell failed to be truthful with investors when he offered and sold those investments, according to the agency. Supposedly, Conwell induced investors’ securities purchases by giving them false information. He supposedly led investors to believe GT Media would be acquired by a pair of Fortune 500 companies. He also persuaded them to invest by claiming an IPO was forthcoming. SEC claimed Conwell falsely represented to investors that he would not receive compensation by selling the GT Media stock. Worst of all, Conwell allegedly stole $161,500 from investors who he offered the GT Media stock to. Instead of investing the funds, Conwell purportedly applied investors’ money towards his personal expenses.

Hoffman Allegedly Sells GT Media Investments Away From LPL Financial

SEC claims that between 2015 and 2018, Kerry Hoffman sold GT Media stock in addition to the company’s convertible promissory notes. Particularly, Hoffman sold 5 advisory clients (seemingly LPL Financial investors) $500,000 in stock and $350,000 in promissory notes. The broker purportedly failed to tell LPL Financial that he sold securities to its clients away from the firm. Supposedly, Hoffman also failed to tell LPL Financial he made $50,000 by selling GT Media, or that he loaned GT Media $77,600. What’s more, SEC claims GT Media used investors’ funds to repay Hoffman.

SEC Claims Hoffman Withheld Information From Investors About Conflicts Of Interest

The Complaint also makes allegations of Kerry Hoffman depriving investors of important adverse information about their GT Media investments. Mainly, Hoffman did not tell investors that GT Media provided him commissions and warrants, according to the SEC. Additionally, Hoffman allegedly failed to tell investors that GT Media would use investors’ funds to repay Hoffman's loans.
SEC brought five counts against Kerry Hoffman or Thomas Conwell for alleged violations of federal antifraud and securities registration laws or rules. Among other things, SEC seeks civil penalties against Hoffman and Conwell, and wants the two to disgorge commissions they received through their alleged “fraudulent conduct” and unregistered securities sales.

LPL Financial And Two Other Brokerage Firms Disaffiliate With Hoffman For Misconduct

The Financial Industry Regulatory Authority (“FINRA”) shows that Kerry Hoffman’s employers disaffiliated with him after allegations of his suspicious conduct arose. Mainly, LPL Financial permitted Hoffman to resign on September 7, 2018. LPL said that Hoffman made arrangements to be a company’s consultant without Hoffman getting permission from LPL Financial. Notably, LPL Financial claims Hoffman sold the unauthorized investments to its clients, something Hoffman evidently does not contest.
Two other securities firms, UBS Financial Services Inc. and Union Capital Company, disaffiliated with Kerry Hoffman as well. Evidently, UBS discharged Hoffman citing his unauthorized trading. Union Capital Company, who Hoffman worked for following his employment with LPL Financial, permitted Hoffman to resign for not making disclosures mandated by firm policy or industry rules.

Have you incurred losses by investing with Kerry Hoffman or Thomas Conwell? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The firm has recovered millions of dollars for investors who have suffered losses due to misconduct of brokers and brokerage firms.