SEC Investigation Attorney David Chase
The Securities and Exchange Commission (SEC) has very little tolerance (none) for financial advisors stealing customer funds, let alone those from vulnerable, elderly investors. Yet that is precisely what Douglas McKelvey, a former securities industry fiduciary, is alleged to have done in a recently filed SEC enforcement complaint. To compound the egregiousness of this case, McKelvey is alleged to have stolen in excess of $1.7 million from two customers who are described as close relatives.
Spanning from June 2013 to February 2022, McKelvey, while an investment adviser and a registered representative, purportedly made approximately 300 unauthorized, fraudulent disbursements of his two customer funds and used the money to pay his personal credit cards. The SEC also claims that McKelvey liquidated securities from the customers’ accounts to raise funds that he, in turn, stole and then engaged in efforts to conceal his fraudulent securities conduct.
The SEC charged McKelvey in federal district court with securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. By way of relief, the SEC has sought a civil penalty, a permanent injunction, disgorgement of his alleged ill-gotten gains in addition to prejudgment interest on the disgorgement.
Not surprisingly whatsoever, McKelvey’s conduct drew federal criminal interest. In a parallel proceeding (i.e., when the U.S. Attorney’s Office and the SEC conduct simultaneous investigations and/or filings concerning the identical, or substantially similar, underlying securities fraudulent schemes), the U.S. Attorney’s Office in the Eastern District of Texas filed criminal charges against McKelvey, who then pled guilty.
The takeaway from this case is clear: the SEC, and quite often the federal criminal authorities, will not hesitate in aggressively prosecuting cases involving theft of investor funds, particularly when it involves the elderly and is perpetrated by a licensed fiduciary.
Contact SEC Investigation Attorney
David Chase, Esq. is a former SEC prosecutor and now SEC investigation attorney and represents individuals in SEC investigations nationwide. You may contact him toll-free at: 800-760-0912 or e-mail at: firstname.lastname@example.org, and can visit the Firm’s website, Law Firm of David R. Chase, a SEC defense law firm, for more information and content at: securitiesfrauddefense.com.