A former Ameriprise financial advisor concealed his arrangement with a fraudster who called himself the “Kryp+0 K!ng” and cost his clients hundreds of thousands of dollars, the SEC says.
At least six clients of Arthur S. Hoffman lost a combined $610,000 on their investments into fraudulent cryptocurrency membership units issued by Zima Global Ventures when federal agents arrested Kryp+o K!ng and another principal of the firm on charges of money laundering and conspiracy, according to the SEC’s Feb. 24 civil complaint in Phoenix district court. Hoffman, a 45-year-old resident of Peoria, Arizona, got fired from Ameriprise and barred from the industry a few months after the arrest of Zima’s principals, FINRA BrokerCheck shows.
On the same day that the SEC filed the case, Hoffman and prosecutors filed a joint motion seeking a permanent injunction that would include disgorgement and a resolution of the SEC’s case. It’s not immediately clear how he came into contact with the scheme in which investigators say John Michael “Kryp+o K!ng” Caruso and Zachary Salter attracted about $9 million in investments from about 90 victims while spending a great deal on the luxury items depicted in their frequent social media posts. What is clear is that the case presents allegations of another one of the crypto-related schemes regulators are warning about with increasing frequency.
“This matter involves an investment adviser who, in violation of his fiduciary duties, deceived…
