SEC Charges Former LPL Advisor Eric Hollifield With Misappropriating $1.7 Million
The U.S. Securities and Exchange Commission (SEC) has charged a former Georgia-based financial advisor with misappropriating at least $1.7 million from clients for personal expenses. In its Complaint filed on June 30, 2022 (Complaint), the SEC alleges that during 2020, Eric S. Hollifield (Hollifield, CRD No. 3091319) “defrauded two advisory clients and one brokerage customer by misappropriating their funds for his personal use,” in violation of the antifraud provisions of the federal securities laws. The SEC’s civil lawsuit follows Hollifield’s securities industry bar ordered by the State of Georgia in September 2021 and by the Financial Industry Regulatory Authority (FINRA) in October 2021.
Hollifield was a longtime financial advisor with approximately 20 years of experience in the securities industry. According to FINRA BrokerCheck, Hollifield has been affiliated with several firms in Georgia since 2003, including Sterne Agee Financial Services, Inc. in Dacula, Georgia from 2008 to 2016. Most recently, from October 2016 until September 2021, Hollifield was an investment adviser representative for (and co-owner of) Hamilton Investment Counsel, LLC (HIC) and a registered representative of LPL Financial LLC (LPL), a broker-dealer providing services to HIC – both located in Dacula. Hollifield was discharged from LPL in August 2021 and from HIC in September 2021.
The SEC alleges that, in certain instances, Hollifield “solicited, advised, or helped HIC clients to invest in Century Warehouse, Inc.,” an entity that Hollifield “controlled or otherwise had account authority over,” without disclosing the relationship or the conflict of interest it presented. When clients invested in HIC, Hollifield “often immediately wired a significant portion to his own accounts for his personal use.” In other instances, Hollifield allegedly misappropriated funds “through a variety of schemes and used the money to purchase [his] home.” Hollifield is alleged to have misdirected approximately $1.7 million towards the purchase of a house located on a 37-acre property in Georgia.
Pursuant to FINRA Rule 2010, brokers are required to “observe high standards of commercial honor and just and equitable principles of trade.” Likewise, FINRA has stated that a fundamental responsibility for fair dealing is “implicit in all member and associated person relationships with customers and others.” (FINRA Rule 2111.01). In addition, under FINRA Rule 3110, broker-dealers such as LPL are required to establish and maintain a system to supervise the activities of its associated persons, reasonably designed to achieve compliance with applicable securities laws and regulations. Customers who suffer losses due to a broker’s fraudulent behavior may be able to pursue a claim against the broker-dealer if the firm failed to adequately supervise its registered representative.
Investors who have suffered losses with Eric S. Hollifield, or another financial advisor, may contact our office at (201) 771-1115 or info@gialawgroup.com for a no-cost, confidential consultation to learn more about their legal rights. The attorneys at Giarrusso Law Group LLC have extensive experience with handling all manner of claims on behalf of investors who have been victimized by securities fraud or related misconduct.