Meridian investment firm's fortunes tumble

Two affiliates of Hopkins Financial Services are pulled into bankruptcy court.

jsowell@idahostatesman.comApril 20, 2014 

A subsidiary of a Meridian company once fined $250,000 by state securities regulators for misleading investors filed for bankruptcy this month.

Hopkins Northwest Fund LLC lists liabilities of between $1 million and $10 million owed to between 100 and 200 creditors, according to an initial filing with the U.S. Bankruptcy Court in Boise. Business bankruptcy filings begin with rather broad checklists of assets and liabilities, then become more specific as the case moves forward.

Officials also checked a box listing the company's assets in the same $1 million to $10 million range.

It's the second bankruptcy action in the past five months by an affiliate of Hopkins Financial Services. In November, investors in Hopkins Growth Fund LLC filed a petition for an involuntary bankruptcy against the company. That bankruptcy is still pending.

In 2009, the securities bureau of the Idaho Department of Finance alleged owners of Hopkins Financial Services misrepresented material facts and ommitted others in pushing its securities to investors.

Randall Hopkins, who was listed in Department of Finance documents as owner of 80 percent of the company in 2009, and minority owners Aaron Van Der Aa and Brian Murphy failed to ensure that investors had the knowledge and experience in business matters to properly evaluate the merits and risks of the investments, the agency charged.

The department also found that the three men sold securities that were required to be registered with the state. In addition, one-year promissory notes issued by the men were considered securities by the state and they were not registered, either.

The state regulator found that Hopkins Financial, which was founded in 1988, appeared to be "very successful" for many years. As business boomed, officials began to take greater risks and cut corners on promises made to investors regarding risk and the steps they would take to limit the risks, the department said.

Besides the fine, Hopkins Financial was barred from selling to new investors unless they were classified as accredited investors - those with a net worth of at least $1 million or an annual income of at least $200,000. The company was also limited to a maximum of 99 total investors per fund.

In addition, the company was required to disclose in all sales brochures the actions taken by the Department of Finance and to submit annual audited financial statements.

In a bankruptcy report filed Friday, Hopkins Growth Fund listed assets of $9 million and equity of $2,658 after liabilities are subtracted. The company listed a zero cash balance.

Court documents list Randall Hopkins as owner of 87 percent of Hopkins Growth Fund, with Murphy and Jo Hopkins with minority ownership.

John Sowell: 377-6423, Twitter: @IDS_Sowell

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