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Former Broker Sentenced to More Than Five Years for Defrauding Retail Investors

Edward E. Matthes, who was charged by the SEC in January 2020 with defrauding 26 elderly retail and advisory clients, has been sentenced in a parallel criminal case to 63 months in prison and ordered to pay approximately $2.4 million in restitution.

Edward E. Matthes, who was charged by the SEC in January 2020 with defrauding 26 elderly retail and advisory clients, has been sentenced in a parallel criminal case to 63 months in prison and ordered to pay approximately $2.4 million in restitution.

Matthes, a former Wisconsin-based registered representative and investment adviser, reportedly convinced his brokerage and advisory customers to invest in what he described as a “safe investment” that would earn a guaranteed 4 percent minimum yield annually.

According to the original complaint, the purported investment did not exist, and Matthes stole approximately $1.4 million for his personal use, as well as an additional $1 million by making unauthorized sales and withdrawals from his customers’ variable annuities.

Matthes, who spent the stolen funds on personal expenses, including a home renovation, car payments, and luxury items, covered up his fraud by creating fake account statements and making approximately $170,000 in Ponzi-like payments to certain investors.

According to his BrokerCheck profile, the Federal Bureau of Investigation began its investigation in March 2019, and the same month, he was barred by FINRA for refusing to participate in its investigation.

Prior to his bar from the industry, he spent six years at Mutual of Omaha Investor Services and a total of 11 years at Thrivent Investment Management, According to BrokerCheck, he was discharged by Mutual of Omaha in March 2019 for “creating fictitious account statements and diverting customer funds for his own personal use.”

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