What You Need to Know
- Douglas E. Elstun charged higher fees than clients had agreed to and applied advisory fees to non-advisory assets, the SEC says.
- Elstun, a former college basketball player, served pro athletes and other retail clients, 401(k) plans and charitable endowments.
- He has not been a registered broker or advisor since leaving Sigma Financial in 2012.
A formerly registered broker and RIA who the Securities and Exchange Commission charged with fraudulently overcharging clients including professional athletes has been ordered to pay a total of $841,079, the SEC said Wednesday.
In a final judgment against Douglas E. Elstun of Lenexa, Kansas, delivered Tuesday by Judge Brian C. Wimes in U.S. District Court for the Western District of Missouri, Elstun was ordered to pay disgorgement of $386,647 with prejudgment interest of $64,338 and a civil penalty of $390,094.
Without admitting or denying the SEC’s allegations, Elstun consented to the entry of the final judgment that also permanently enjoins him from violating the charged provisions.
Elstun did not immediately respond to a request for comment Friday. He has not been a registered broker or advisor since leaving Sigma Financial in 2012, according to his report on the Financial Industry Regulatory Authority’s BrokerCheck website.
Before joining Sigma in 2002, he was a rep and broker for FSC Securities 1996-2002 and G. R. Phelps & Co. 1993-1996.
Elstun was charged with repeatedly defrauding and breaching his fiduciary duty to advisory clients of his investment advisory firm, Crossroads Financial Management.
The SEC’s complaint, filed March 29, alleged that, from 2015 through 2018, Elstun fraudulently overcharged clients via undisclosed fees, including higher advisory fees than clients had agreed to pay and by applying the advisory fee to non-advisory assets.