theft

In June of 2024 Scott Greco represented a client who received a FINRA arbitration award of her full damages, interest, and attorney’s fees against Interactive Brokers regarding an unauthorized money transfer from the client’s account. The case involved the unauthorized access of the Virginia customer’s online account by criminals who transferred funds without the customer’s authorization to an account in the UK. Notably, Interactive Brokers (IB) took no responsibility for its actions and compliance failures and attempted to blame the customer. Read the award here.

FINRA securities brokerage firms such as Interactive Brokers have various duties under FINRA Rules and federal law to safeguard customer assets and guard against money laundering.

The U.S. Bank Secrecy Act (BSA) is set out in 31 U.S.C. Sec. 5311 – 5330. Securities Broker-Dealers such as IB are defined as a “financial institution” under the BSA. 31 U.S.C. Sec. 5312(a)(2). “Money Laundering” is defined in 31 U.S.C. Sec. 5340 as “the movement of illicit cash or cash equivalent proceeds into, out of, or through the United States, or into, out of, or through United States financial institutions…”

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.

Articles Tagged with theft

FINRA Arbitration Award Against Interactive Brokers

Former New Jersey Wells Fargo broker indicted for theft of customer funds