SEC Charges Adviser with Stealing $3 Million to Pay Off Credit Cards, Buy Gold Coins
The Securities and Exchange Commission has charged Kenneth Welsh with stealing nearly $3 million from his advisory and brokerage clients.
The Securities and Exchange Commission has charged Kenneth Welsh, a former New Jersey-based broker and investment adviser representative with stealing nearly $3 million from his advisory and brokerage clients to buy gold coins and other precious metals, and to pay family credit card accounts that he controlled.
The SEC claims that from January 2016 to January 2021, Welsh transferred funds from his clients’ and customers’ accounts to pay off balances in credit card accounts held in the names of his wife and parents. Welsh is also accused of causing checks to be fraudulently drawn on his clients’ and customers’ accounts.
The SEC alleges that Welsh made at least 137 fraudulent transactions and used the stolen funds to purchase gold coins and other precious metals, buy luxury goods, and make electronic fund transfers to himself.
According to his BrokerCheck profile, Welsh spent eight years at Wells Fargo Clearing Services until he was fired in June for purportedly misappropriating funds from clients. He has multiple pending customer disputes alleging similar conduct, with damage requests ranging from $21,000 to nearly $1.9 million.
“We allege that Welsh raided the accounts of his clients and customers for his personal gain,” said Richard Best, director of the SEC’s New York regional office. “We will continue to vigorously pursue investment professionals who abuse the trust placed in them by clients and customers.”
The SEC’s complaint, filed in U.S. District Court for the District of New Jersey, charges Welsh with violations of the antifraud provisions of the federal securities laws and seeks injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.
A parallel criminal complaint was filed by the U.S. Attorney’s Office for the District of New Jersey.
