A former broker and investment advisor representative for Wells Fargo has been charged with stealing funds from his clients to pay for personal expenses and purchases, according to InvestmentNews.
In a complaint filed in federal court in New Jersey, the Securities and Exchange Commission charged 31-year-old Kenneth A. Welsh with misappropriating at least $2.86 million from the accounts of multiple clients and customers. The SEC said he used the funds to buy gold coins and other precious metals as well as purchasing luxury goods. He also allegedly transferred some of the money into family credit card accounts to pay off balances.
According to the complaint, Welsh made at least 137 fraudulent transactions from 2016 to 2021. He was charged by the SEC with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a)(1) and (a)(2) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
The complaint filed last week is seeking injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties. Wells was fired in June from his position at Wells Fargo Advisors in Fairfield, New Jersey after the allegations regarding his misconduct surfaced.
The U.S. Attorney’s Office has also announced criminal charges against Welsh, who was arrested last week at his New Jersey home. He was charged with four counts of wire fraud and one count of investment advisor fraud.
The attorneys at Lewitas Hyman understand how financial professionals and their firms are supposed to operate through decades of experience working for the SEC and firms like Morgan Stanley and UBS Financial Services. If you have suffered investment losses as a result of misconduct by your financial professional or their firms, contact us at (312) 291-4600 or through our online contact form for a free consultation.