U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25742 / June 7, 2023
Securities and Exchange Commission v. Douglas McKelvey, Civil Action No. 4:23-cv-00564 (N.D. Tex. filed June 06, 2023)
SEC Charges Financial Advisor with Fraud for Stealing From Elderly Customers to Pay Personal Expenses
The Securities and Exchange Commission yesterday charged Douglas McKelvey, a former financial advisor with fraud for misappropriating more than $1.7 million from two elderly brokerage customers who were close relatives of McKelvey’s.
The SEC’s complaint alleges that from June 2013 to February 2022, while employed as a registered representative and investment adviser representative in the Southlake, Texas office of a large financial institution, McKelvey initiated over 300 fraudulent and unauthorized disbursements of funds from the two customers’ accounts to make payments on credit cards used by McKelvey and his wife to pay their personal expenses. McKelvey allegedly also sold securities from the customers’ accounts to generate some of the funds he misappropriated and took steps attempting to conceal his misconduct.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of Texas, charges McKelvey with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, the disgorgement of allegedly ill-gotten gains plus prejudgment interest, and a civil penalty.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of Texas today announced criminal charges against McKelvey. McKelvey pled guilty to those charges.
Older investors can find additional information about how to protect their investments and the latest investor bulletins at Investor.gov.
The SEC’s investigation, which is continuing, is being conducted by Emmy Rush, James Flynn, and Wendy Tepperman and is being supervised by Tejal D. Shah, all of the New York Regional Office. Ms. Rush and Ms. Tepperman will lead the litigation, with assistance from Matthew J. Gulde and Rebecca Fairchild of the Fort Worth Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of Texas, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.