On November 13, 2017, it was announced that the Securities and Exchange Commission had filed charges against a Georgia-based former investment adviser and broker representative. Jay Costa Kelter has been accused of defrauding three retired clients out of more than $1.8 million. The SEC’s complaint was filed in a federal court room in Tennessee. It alleges that from September 2013 to 2016, Kelter made representations to clients.
He is accused of using their money to make expensive purchases for himself. Kelter left his former employer in 2013. He managed to convince three seniors to transfer their accounts to a new brokerage firm so he could continue providing them with investment advice, while also trading on their behalf. The victims opened accounts at TD Ameritrade and provided Kelter with access to their new accounts.
The complaint alleges that Kelter sold securities in two client accounts to make unauthorized payments to his company, BEK Consulting Partners LLC. The defendant allegedly told his clients that BEK was a company he was investing in on their behalf. In reality, the SEC claims that Kelter used the misappropriated funds to buy a luxury vehicle and to pay his daily expenses.
It is alleged that Kelter guaranteed a third client that he would cover their trading losses up to $200,000. This convinced the client to allow Kelter to continue trading using his account. The Securities and Exchange Commission is seeking civil penalties, disgorgement, and permanent injunctive relief. At this point in time, the defendant is innocent until proven guilty beyond a reasonable doubt.
Further details can be found here.