The Securities and Exchange Commission says it has charged a former financial advisor with misappropriating $1.7 million from two advisory clients and one brokerage customer to buy himself a home.
Starting at least in January 2020, Eric Hollifield of Winder, Georgia, allegedly transferred client assets to an outside business that he controlled and then moved some of the money to his own accounts, without clients’ permission, according to a complaint filed in federal district court in Gainesville, Georgia last week.
Hollifield allegedly moved at least $425,000 of client money through the outside business and tapped a portion of that for a partial payment on a 37-acre home in Winder for himself, the SEC says. He also allegedly recommended that a brokerage customer transfer $1.24 million to another financial institution, purportedly for higher interest. As soon as he had the customer’s permission to make the transfer, Hollifield allegedly instead sent the money to a real estate closing agent to finalize the purchase of the home.
The regulator says it’s seeking permanent injunctions and monetary relief.
Hollifield joined the financial services industry in 1998, registering as a broker with Merrill Lynch, according to BrokerCheck. He then had stints as a broker and investment advisor at H&R Block Financial Advisors and Sterne Agee Financial Services before registering as a broker with LPL in 2016, according to his record.
That year, he also registered as an investment advisor with Hamilton Investment Counsel, according to the SEC’s Investment Adviser Public Disclosure database.
Hollifield was also a co-owner of HIC, the SEC says in its complaint. That entity's SEC registration was terminated last April, SEC records show.
A lawyer listed as representing Hollifield in court documents, Craig H. Kuglar, did not respond to a request for comment sent through his firm's website Tuesday. No telephone number was listed.
In September last year, both LPL and HIC discharged Hollifield over alleged failures to disclose his outside business activity, according to BrokerCheck.
The Financial Industry Regulatory Authority barred him from the industry the following month after he failed to cooperate with its investigation over allegations about the “potential conversion of funds from an elderly customer,” the industry’s self-regulator said.
The SEC said last week in its complaint against Hollifield that it has also charged HIC and chief compliance officer Jeffrey Kirkpatrick in separate settled administrative and cease-and-desist proceedings that accused them of failing to respond “to numerous red flags surrounding Hollifield's outside business activities.
Without admitting or denying the findings, HIC agreed to a censure, a cease-and-desist order, and a civil penalty of $150,000. Kirkpatrick consented to a cease-and-desist order, a civil penalty of $15,000, and a five-year limit on his ability to act in a supervisory or compliance role in the industry, the SEC says.
Do you have a news tip you’d like to share with FA-IQ? Email us at email@example.com.