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Regulation and Compliance > Federal Regulation > SEC

SEC Bars Ex-Advisor Charged With Defrauding At Least 100 Clients

By Jeff Berman

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What You Need to Know

  • The former advisor and broker was barred by FINRA prior to being barred by the SEC on Friday.
  • U.S. District Court for the Western District of Wisconsin entered a partial judgment against Shillin in November.
  • He allegedly received hundreds of thousands of dollars in ill-gotten gains as a result of his fraudulent activities.

The Securities and Exchange Commission issued an order on Friday permanently barring from the industry a former Raymond James Financial Services and Alliance Global Partners broker who was charged with defrauding at least 100 clients.

As part of the order, Michael Francis Shillin, 32, of Appleton, Wisconsin, is barred from associating with any broker, dealer, investment advisor, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization, and from participating in any offering of a penny stock.

From August 2014 through October 2020, Shillin was an investment advisor representative and a registered representative with various SEC-registered investment advisors and broker-dealers. He was also the majority owner and managing member of Shillin Wealth Management, according to the SEC.

Raymond James and AGP did not immediately respond to requests for comment on Monday.

The SEC’s Complaint

On Nov. 18, the U.S. District Court for the Western District of Wisconsin entered a partial judgment against Shillin in a civil action that was filed by the SEC on Sept. 23, charging him with defrauding at least 100 clients.

According to the SEC’s complaint, Shillin, while acting as an advisor, fabricated documents and made misrepresentations to clients, many of whom were older adults. As alleged, Shillin misrepresented that certain clients had successfully subscribed for IPO or pre-IPO shares in high-profile companies when they had not, and lied to clients about the true value of their investment portfolios.

Shillin encouraged several clients to roll over their existing life insurance policies into new policies, causing certain clients to sell securities to pay premiums for policies that were non-existent or had far fewer benefits than Shillin claimed, the SEC alleged.

Shillin received hundreds of thousands of dollars in ill-gotten gains as a result of his fraudulent activities, according to the SEC.

The SEC’s complaint charged Shillin with violating antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

Without admitting or denying the SEC’s allegations, Shillin consented to the entry of a judgment permanently enjoining him from violating securities laws. The judgment also barred Shillin from acting as an officer or director of a public company and ordered him to pay disgorgement, prejudgment interest and a civil penalty in amounts to be determined by the court at a later date.

Barred by FINRA 

In December, Shillin was barred from the industry by the Financial Industry Regulatory Authority after he refused to produce information or documents or give on-the-record testimony as requested by FINRA staff.

Shillin was the subject of 37 client disputes in 2020 (six of them) and 2021 (the remaining 31), according to his report on FINRA’s BrokerCheck website.

The disputes were all filed after he was terminated by Raymond James on May 21, 2018, and voluntarily resigned from AGP on Oct. 2, 2020, while under investigation for alleged securities violations. Four were closed without action. In the disputes, most of which are still pending, Shillin was accused of making a diverse array of misrepresentations to clients.

Without admitting or denying FINRA’s findings, Shillin signed a FINRA letter of acceptance, waiver and consent on Dec. 14, agreeing to be barred from associating with any FINRA member firm in all capacities. FINRA signed the letter Dec. 18.

Jeff Berman

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