Former Ameriprise Financial Services, LLC Advisor, Arthur Hoffman, Barred By FINRA For Allegedly Failing To Provide Documents In Relation To Investigation Into Outside Business Activities
Arthur Hoffman (CRD # 3193754) was a Financial Advisor at Ameriprise Financial Services, LLC in Glenndale, AZ. Arthur Hoffman has been in the securities industry since 1999 and previously worked at Wedbush Securities, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Morgan Stanley DW Inc.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on May 13, 2020, Arthur Hoffman was barred by FINRA. According to the FINRA sanction:
“Without admitting or denying the findings, Hoffman 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 Hoffman had been suspended for company policy violations related to outside business activities and private securities transactions.”
For a copy of the FINRA sanction, click here
In addition, Arthur Hoffman has been the subject of two customer complaint disclosures, alleging sales practice misconduct. Among the complaints allege the following:
• 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.” Alleged damages are $172,688.03 and the matter remains pending.
• 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 matter settled for $329,500.
In addition, Arthur Hoffman had an employment separation May 2020 after allegations. According to FINRA Arthur Hoffman was discharged from Ameriprise Financial Services, LLC following allegations that he “violated company policy related to outside business activities and private securities transactions.”
For a copy of Arthur Hoffman’s CRD, click here
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
Reasonable basis suitability requires that a recommended investment or investment strategy be suitable or appropriate for at least some investors. Reasonable basis suitability requires an advisor to conduct adequate due diligence so that he or she can determine the risks and rewards of the investment or investment strategy.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.