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September 02, 2020 at 05:46 PM
(Photo: Shutterstock)
A broker stole more than $300,000 from a retired 73-year-old client by liquidating securities in the client’s investment account and transferring the proceeds to a bank account held jointly with the client, according to the Securities and Exchange Commission.
In a complaint filed Tuesday at the U.S. District Court for the District of Connecticut, the SEC said Matthew O. Clason of Cheshire, Connecticut, withdrew cash from the joint bank account on numerous occasions and at different bank locations as part of the fraudulent behavior that started in at least December 2018.
The complaint alleged that the client did not know of or approve the withdrawals and did not receive the cash that Clason withdrew.
According to the complaint, Clason “cultivated a personal relationship” with the client, driving her to appointments and running errands for her. He sometimes withdrew small sums of money at the client’s request, to help her cover monthly expenses.
Although the SEC did not name the firms that Clason was affiliated with at the time, a report summary at the Financial Industry Regulatory Authority’s BrokerCheck website indicates he was associated with LPL as a broker and Waltham, Massachusetts-based Integrated Wealth Concepts as an RIA.
LPL on Wednesday confirmed that Clason had been working for it. “Mr. Clason was terminated from LPL on Aug. 19, 2020, after we became aware of apparent misconduct,” LPL spokeswoman Lauren Hoyt-Williams told ThinkAdvisor. “We are cooperating with regulators and law enforcement on their investigations,” she added.
Integrated Wealth Concepts did not immediately respond to a request for comment. However, the SEC complaint said that, on Aug.13, Clason was “fired by the advisory firm for failing to comply with firm policies with respect to handling client funds.”
More Details
Since about 2015 or 2016, Clason provided investment services to the client, managing her investments in five accounts, according to the SEC. The total assets under management in the five accounts as of July 31, 2020 was about $482,000, the complaint said. As of August, however, the client believed she had about $1 million under management with Clason, according to the complaint.
Clason made several transfers from the client’s advisory accounts into the joint bank account, the SEC claimed, adding that to fund the transfers, Clason “repeatedly sold securities” and transferred the proceeds of those sales to the joint bank account.
From December 2018 to August 2020, there were 45 transfers out of the advisory accounts totaling $330,000, most of which were funded by the sale of securities in the client’s advisory accounts, the SEC alleged.
