Securities Fraud Blog
A former stockbroker / investment advisor from Bergen County, New Jersey, has been indicted for allegedly stealing over $3 million from five unsuspecting clients. Kenneth A. Welsh, 42, of River Edge, has been charged with four counts of wire fraud and one count of investment advisor fraud, as announced by U.S. Attorney Philip R. Sellinger on November 16, 2023.
According to the indictment, from July 2017 through March 2021, Welsh, operating as a financial advisor registered with Wells Fargo Clearing Services, purportedly abused his position to misappropriate funds entrusted to him by clients. Instead of responsibly managing their investments, Welsh is accused of diverting substantial sums into accounts under his control, leaving his clients in financial distress. The charges carry severe penalties, with each wire fraud count potentially leading to 20 years in prison and a $250,000 fine, while the investment advisor fraud count could result in five years behind bars and a $10,000 fine, or twice the gross gain or loss from the offense.
The indictment details that Mr. Welsh allegedly used multiple fraudulent means to siphon off customer funds, including having customers sign forms in blank, fraudulently forging signatures, and carrying out unauthorized wires from customer accounts.
U.S. Attorney Philip R. Sellinger emphasized the importance of maintaining trust in financial advisors, stating that investors must have confidence that their advisors will act in their best interests. The FBI, led by Special Agent in Charge James E. Dennehy, played a crucial role in investigating the case.
FINRA Broker-Dealers such as Wells Fargo have duties to supervise their registered representatives such as Mr. Welsh. They must have a reasonable supervisory system designed to follow up on red flags and prevent violations of the law such as what occurred here.
Mr. Welsh’s FINRA Brokercheck report reveals that Wells Fargo has already paid out over a million dollars in settlements of claims related to Mr. Welsh, and another multi million dollar arbitration is pending.
W. Scott Greco of the securities fraud law firm Greco & Greco, P.C. has decades of experience representing customers against their brokerage firms related to broker theft of customer funds. If you believe you may have been the victim of a fraud or theft by your trusted financial advisor, please contact securities fraud lawyer Scott Greco for a free attorney consultation about your case.