On October 19, 2015, the Securities and Exchange Commission (SEC) announced that former president of Coastal Investment Advisors Inc., Michael Donnelly, and its affiliated broker-dealer, agreed to settle charges that he allegedly stole close to $2 million from his former clients.
The settlement stems from a complaint filed by the SEC earlier this year alleging that Donnelly had taken funds from his unsophisticated and elderly clients and used the funds for his own personal expenses, including car payments, rent, tuition for his children’s private school, and membership fees to a private golf club.
In connection with the alleged scheme, Donnelly was accused of sending his investors fake information including false account statements and trade confirmations. He was also alleged to have misled investors about the performance of their purported investments
By settling the case, Donnelly admitted to defrauding clients and agreed to disgorge $1.9 million and a prejudgment interest amount of $365,723. He also agreed to be barred permanently from any connection with the securities industry.
In a separate, but parallel action, Donnelly is also facing criminal charges recently announced by the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
The securities fraud lawyers at Meyer Wilson are dedicated to protecting innocent investors when they have been defrauded. If you invested and lost money with Michael Donnelly, call us today and discuss your case with us in a free consultation.