SEC Charges Former Broker with Defrauding Retail Investors
The Securities and Exchange Commission has charged Edward Matthes, a former Wisconsin-based registered representative and investment adviser, with defrauding elderly retail brokerage customers and investment advisory clients.
The Securities and Exchange Commission has charged Edward Matthes, a former Wisconsin-based registered representative and investment adviser, with defrauding 26 of his mostly elderly retail brokerage customers and investment advisory clients out of approximately $2.4 million. Matthes has agreed to settle the SEC’s charges, with monetary relief to be determined by the court at a later date.
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.
The SEC claims that Matthes convinced his brokerage and advisory customers to invest in what he described as a safe investment that would earn a guaranteed minimum yield of 4 percent per year.
As alleged in the complaint, the purported investment did not exist, and Matthes stole approximately $1.4 million for his personal use, and an additional $1 million by making unauthorized sales and withdrawals from his customers’ variable annuities.
Matthes purportedly spent the misappropriated funds on personal expenses, including home renovation expenses, car payments, and luxury items. To cover up his fraud, the SEC alleges that he created fake account statements and paid approximately $170,000 in Ponzi-like payments to certain investors.
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 BrokerCreck.
Matthes was charged with violating the antifraud provisions of various federal securities laws, and without admitting or denying the allegations, consented to being permanently enjoined from future violations. He will also pay disgorgement, prejudgment interest, and penalties in amounts to be determined by the court at a later date. The settlement is subject to court approval.
