Former NY financial advisor charged with misappropriating over $1 million from clients

On Behalf of | Dec 10, 2021 | Financial Advisor Misconduct

Federal prosecutors have charged a New York financial advisor with orchestrating a scheme to misappropriate over $1 million from current and prospective clients, according to ThinkAdvisor.

43-year-old Jeffrey L. Slothower is facing charges of wire fraud, investment advisor fraud, and money laundering. The Justice Department outlined the charges against him in an indictment filed in U.S. District Court for the Eastern District of New York.

Slothower, a Southampton resident, left Merrill Lynch in 2016 and formed his own New York investment advisory firm, Battery Private Inc. According to the indictment, he solicited business from a California couple whose money he had managed at another financial services firm, telling them he could beat any rate of return they were currently receiving without any market risk.

One of the clients, referred to as “Victim-1” sent over $500,000 to Slothower that would purportedly be invested in bonds backed by homeowner’s association fees. Instead, Slothower allegedly used the funds to wire money to himself, buy a luxury car, and pay fees for a private golf club on Long Island. He then made payments to “Victim-1” that were falsely represented as distributions from the investment, prosecutors said.

The client’s spouse, identified as “Victim-2”, later sent $500,000 to Slothower at Battery Private for a similar investment in bonds. But Slothower allegedly used that money to pay personal credit card bills among other things, while also sending payments that were misrepresented as distributions.

“As alleged, Slothower executed a calculated scheme in which he repeatedly lied to his current and prospective clients about putting their money into legitimate investments, when in reality he stole their money to fund his lavish lifestyle,” said Breon Peace, United States Attorney for the Eastern District of New York. “This Office will vigorously investigate and prosecute corrupt financial advisers like the defendant who abuse their clients’ trust and violate the law to enrich themselves.”

Slothower was arrested at his Long Island home and appeared before a federal judge via videoconference on Monday. If convicted of the charges, he faces up to 20 years in prison.

At Lewitas and Hyman, our financial advisor misconduct attorneys understand the financial and emotional ramifications of investment losses caused by the misconduct of financial professionals, and are uniquely qualified to represent individual investors in investment loss matters. 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.

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