Thomas Conwell and Kerry Hoffman

Date:

July 15, 2019

Type of alert:

Securities Fraud  

On July 1, 2019, the SEC charged Thomas V. Conwell of Fort Myers, Florida and Kerry L. Hoffman of Chicago, Illinois for fraudulently selling securities to investors.

The SEC’s Complaint alleges that between July 2015 and July 2018, Conwell and Hoffman raised over $3.3 million from approximately 46 investors through the sale of unregistered GT Media, Inc. securities. According to the Complaint, 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.

Conwell was previously enjoined by the SEC and criminally convicted for stealing money from investors.

The Complaint also alleges Conwell misappropriated $161,500 from investors, which he used to pay his personal expenses. According to the Complaint, Hoffman, a registered representative and investment advisory representative at a LPL Financial, solicited certain of 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, filed in federal district court in Chicago, charges Conwell and Hoffman with violating the antifraud provisions of the Securities Exchange Act and the broker-dealer registration provisions of the Act among other charges. The SEC seeks permanent injunctions and monetary relief.

The SEC separately 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. According to the order, the SEC found the company violated the registration provisions of the Securities Act and imposed a cease-and-desist and a $173,436 civil penalty.

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