The Securities and Exchange Commission charged a Chicago-area investment advisor representative on Tuesday with misappropriating more than $900,000 from a client’s account through more than 40 unauthorized transactions.
The SEC’s complaint, filed in federal court in Chicago, alleges that William P. Carlson Jr., an investment advisor representative associated with a registered investment advisor, forged a client’s signature on check and journal requests and caused checks to be issued from the client’s account to a third party who gave the proceeds to Carlson.
According to the SEC, Carlson also directed that checks made payable to the client be issued from the client’s account, and then intercepted those checks, forged the client’s endorsement on those checks, and deposited the checks into his own account. In submitting these fraudulent check requests, Carlson repeatedly caused securities held by the client to be sold to fund the unauthorized withdrawals.
The SEC seeks a permanent injunction, disgorgement, prejudgment interest and civil money penalties. In a parallel action, the U.S. Attorney’s Office for the Northern District of Illinois filed criminal charges against Carlson.
Former Investment Banker Sentenced to 3 Years in Prison for Insider Trading
Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York sentenced former investment banker Sean Stewart to three years imprisonment on Feb. 17, according to the SEC.
Stewart was criminally charged on May 14, 2015. The charges arose out of the same conduct alleged by the SEC in a complaint filed the same day.
The SEC’s complaint alleges that, in a scheme spanning at least four years, +Stewart illegally tipped his father, Robert K. Stewart, about future mergers and acquisitions involving clients of two investment banks where Sean Stewart worked. The complaint alleges that his father, a certified public accountant, cashed in on the tips by placing and directing highly profitable securities trades ahead of the public announcement of these corporate transactions, generating approximately $1.1 million in illicit proceeds.
On Aug. 12, 2015, Robert Stewart pled guilty to conspiracy to commit securities fraud. On Aug. 17, 2016, Sean Stewart was convicted of insider trading and related charges.
The SEC’s litigation against the Stewarts, which was stayed pending resolution of the criminal action, is ongoing. The SEC seeks an injunction from further violations of the charged provisions of the federal securities laws, disgorgement of ill-gotten gains, civil penalties, and an officer and director bar against Robert Stewart.
SEC Charges Forex Trader With Bilking Clients to Buy Lingerie, Fast Food
The SEC charged Steve H. Karroum (aka Mustapha Karroum) and his company FX & Beyond Corp. with defrauding investors out of $1.7 million in a foreign exchange trading program.