The Securities and Exchange Commission charged Douglas McKelvey, a former financial advisor with fraud for misappropriating more than $1.7 million from two elderly brokerage customers who, according to the SEC, were close relatives of McKelvey’s.
The SEC’s complaint alleges that from June 2013 to February 2022, while employed as a registered representative and investment adviser representative in the Southlake, Texas office of Morgan Stanley, McKelvey initiated over 300 fraudulent and unauthorized disbursements of funds from the two customers’ accounts to make payments on credit cards used by McKelvey and his wife to pay their personal expenses.
McKelvey allegedly also sold securities from the customers’ accounts to generate some of the funds he misappropriated and took steps attempting to conceal his misconduct.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Texas, charges McKelvey with violations of the antifraud provisions. The SEC seeks permanent injunctive relief, the disgorgement of allegedly ill-gotten gains plus prejudgment interest and a civil penalty.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Texas announced criminal charges against McKelvey. McKelvey pled guilty to those charges.
According to BrokerCheck, McKelvey served as an advisor for Morgan Stanley for 12 years until he was barred by FINRA in 2022 for refusing to provide information and documents. He previously worked for Citigroup Global Markets Inc. and UBS Financial Services Inc.