The Securities and Exchange Commission has obtained a partial judgement against Michael F. Shillin, a former Raymond James advisor accused of defrauding at least 100 investment advisory clients, many of whom were elderly, by fabricating documents and making misrepresentations about their investments.
According to the SEC, Shillin allegedly told certain clients that they had subscribed for IPO or pre-IPO shares, or that he had bought stock on their behalf, in certain “coveted companies.” He also is accused of misrepresenting the purchase of life insurance policies with long-term care benefits, with several clients rolling over their existing policies into new ones, which were either non-existent or had far fewer benefits than he claimed.
For example, one of his clients reportedly decided to retire early when he was told that he was $450,000 richer after Shillin had purchased SpaceX stock on his behalf. Another client was allegedly told that his life insurance policy contained a long-term care benefit, which the client learned was untrue after he was diagnosed with stage IV cancer, the SEC said.
According to the SEC, Shillin “went to great lengths to deceive his clients,” including setting up an online portal so they could monitor their portfolio of securities and profits – much of which were “pretend.”
Shillin received compensation for his investment advice from commissions and advisory fees that were calculated as a percentage of the assets he managed for his clients. The SEC claims that he received “hundreds of thousands of dollars” in ill-gotten gains.
Shillin was affiliated with Raymond James for close to four years before he was terminated in mid-2018 for “failing to follow firm directive regarding the payment of client CPA fees,” according to his BrokerCheck profile. He then founded SWM, which offered securities and advisory services through A.G.P./Alliance Global Partners. He resigned less than two years later when he became the subject of an investigation after allegations surfaced about a “life insurance product [that provides] long-term care.”
Shillin has close to 40 customer disputes listed on his BrokerCheck profile, with requests for damages ranging from $5,000 to $1 million, many of which are still pending.
The SEC previously charged Shillin with violating the antifraud provisions of various federal securities laws. Without admitting or denying the SEC’s allegations, he consented to be permanently enjoined from violating those provisions and was barred from the industry. He was ordered to pay disgorgement, prejudgment interest, and a civil penalty in amounts that will be determined by the court at a later date.
Shillin was barred by FINRA in December 2020 for failing to participate with their investigation, and within weeks, his state insurance license was suspended by the Wisconsin Office of the Commissioner of Insurance, and he was permanently barred by the Wisconsin Securities Division.