On October 28, 2021, the Securities and Exchange Commission (SEC) charged Kenneth Welsh with stealing approximately $3 million from his clients. Welsh allegedly used the money to buy gold coins and other precious metals in addition to transferring money to his family’s credit card accounts.

Welsh is thirty-one years old and lives in River Edge, New Jersey. He was a registered broker-dealer representative and investment advisor representative of Wells Fargo Clearing Services, LLC, from September 2012 until June 2021. Welsh was terminated after the company discovered his alleged misconduct.

The SEC reports that Welsh stole at least $2.86 million by abusing his power as an investment representative and broker-dealer representative. In these roles, Welsh managed advisory accounts and brokerage accounts. From January 2016 until January 2021, Welsh allegedly used more than a hundred fraudulent Automated Clearing House transactions to transfer funds from his clients’ accounts to family credit cards. The credit card accounts were in his wife’s and parents’ names, but they were reportedly used for Welsh’s benefit.

Welsh also allegedly caused numerous checks to be drawn on his clients’ accounts to secretly buy precious metals, including gold coins. The SEC reports that Welsh’s clients did not knowingly authorize the transactions. Furthermore, many of Welsh’s clients were financially unsophisticated and elderly.

The SEC complaint alleges Welsh frequently sold securities in his clients’ accounts to make cash available for his benefit. Welsh allegedly led the clients to believe the securities sales would maximize their investment returns instead of being transferred to his family credit cards.

According to the SEC, Welsh also manually altered the payee line of several checks for a different purpose than the client intended. Welsh’s FINRA BrokerCheck reveals a pending customer dispute from April 2021 that claims Welsh is the “likely perpetrator” of theft by altering the client’s checks.

Welsh has two additional pending customer disputes from June of 2021. Both disputes claim that Welsh stole money and made unauthorized transfers from their accounts. The complaints request over two million in combined damages.

The SEC requested injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties. The District of New Jersey U.S. Attorney’s Office has also announced criminal charges against Welsh.