The Securities and Exchange Commission has obtained a final judgment against Jay Costa Kelter, a former registered investment adviser and registered representative who was previously charged with defrauding three retired clients out of nearly $1.9 million from 2013 to 2016.
According to the SEC’s complaint, after Kelter left his former employer Berthel Fisher & Company in 2013, he convinced three seniors to move their accounts to a new brokerage firm so he could continue to provide investment advice and trade on their behalf. The clients opened new accounts at TD Ameritrade and gave Kelter access.
Kelter allegedly sold securities in two of the accounts to make unauthorized payments to his company BEK Consulting Partners LLC. He transferred $1.5 million from one client by selling her securities and transferring the money without her knowledge, the SEC said. In another instance, he sold $200,000 under the guise that he would invest the funds in a corporate certificate of deposit.
Kelter used the stolen money to purchase a Bentley automobile and pay for a family vacation and other personal expenses. He also used one client’s funds to return money to another client, and for futures and options trading in unrelated accounts.
In a parallel criminal matter, Kelter pled guilty to one count of securities fraud and one count of wire fraud. He was sentenced to 29 months in prison and ordered to pay restitution of nearly $1.5 million.
To resolve the SEC’s allegations, Kelter must pay disgorgement of approximately $1.5 million and prejudgment interest of $332,000, which will be deemed satisfied by the restitution ordered against him in the criminal case. Kelter also consented to an order permanently barring him from the securities industry.