Claimant alleges that beginning around September 2012, the financial advisor made unsuitable investments, specifically in unit investment trust (UIT) and exchange-traded funds (ETF), to maximize his compensation

CLIENT ALLEGES THAT FUNDS WERE MISAPPROPRIATED FROM HIS ACCOUNT ON TWO OCCASSIONS IN 2012

$50,000.00

Arbitration: Claimant alleges that Financial Advisor recommended eight Equity-Indexed Annuity Contracts that she alleges were not suitable for her. Complaint: Client's attorney complains that monies were withdrawn from her brokerage account without her authorization in 76 transactions over a 27 month period. (12/1/2018-3/1/2021)

$5,850,000.00

Customers verbally complained that the financial advisor recommended inappropriate investments, and also expressed concerns related to annual fees, and potential fraud. (5/13/2013-11/10/2021)

$30,531.61

Client complained that the financial advisor opened a margin account without permission and also wrote checks from his account without permission. (9/11/2012-6/18/2021)

$405,560.00

$357,525.00

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Plaintiff Securities and Exchange Commission ("Commission"), for its Complaint against Defendant Kenneth A. Welsh ("Defendant" or "Welsh"), alleges that this case involves the fraudulent misappropriation of at least $2.86 million by Welsh, who until recently was a financial adviser with a large financial institution registered with the Commission as a broker-dealer and investment adviser ("Financial Institution A"). In his role, Welsh handled investment accounts for the owners of advisory accounts ("clients") and the owners of brokerage accounts ("customers"). Between at least January 2016 and January 2021 (the "Relevant Period"), Welsh used more than a hundred fraudulent Automated Clearing House ("ACH") transactions to transfer funds from his clients' and customers' accounts to credit card accounts held in the names of his own wife and parents, which he used for his personal benefit. Welsh also caused numerous checks to be fraudulently drawn on his clients' and customers' accounts, which he secretly used to buy gold coins and other precious metals and to pay for his personal expenses. None of these transactions were knowingly authorized by his clients or customers, some of whom were elderly and financially unsophisticated. In many cases, Welsh intentionally circumvented Financial Institution A's policies and procedures to carry out these transfers, including by manually altering checks. Welsh frequently sold securities in his clients' and customers' accounts - sometimes only days before the fraudulent transfers - so that cash would be available in the accounts for him to steal. Welsh did not disclose to his victims that the purpose of these securities sales was to facilitate his scheme, rather than to maximize their investment returns and total assets. As a result of the conduct described in this Complaint, Welsh violated Sections 17(a)(1) and 17(a)(2) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

Wire Fraud

Investment Advisor Fraud

Client verbally complained that financial advisor assured him that he would see a purchase of stock on his next statement. However, order was GTC and had not filled by the time next statement was issued. (3/24/2020-8/4/2021)

$21,355.27

Attorney for complainant claimed that funds were stolen by the financial advisor. (1/28/2016-1/21/2021)

$225,000.00

$346,040.02

Wells Fargo Clearing Services, LLC.

Discharged

Allegations were made that Mr. Welsh may have misappropriated funds from Wells Fargo Clearing Services, LLC clients.

Attorney for customer wrote that the Financial Advisor is the likely perpetrator of a theft fraud on the client related to the alteration of checks, and payments and transfers from the client's accounts. (9/11/2014)

$592,920.32