Former Wells Fargo Clearing Services, LLC broker Kenneth Welsh (CRD# 4657872) allegedly stole $2.86 million from customers. He was registered with Wells Fargo Clearing Services, LLC in Fairfield, New Jersey, from 2012 to 2021, when he was terminated regarding, “Allegations were made that Mr. Welsh may have misappropriated funds from Wells Fargo Clearing Services, LLC clients.”
In October 2021, The United States Attorney’s Office for the District of New Jersey reported that Kenneth Welsh stole $2.86 million from five clients and used the money to pay for personal expenses as well as to gamble. Kenneth Welsh was arrested and charged with four counts of wire fraud and one count of investment advisor fraud. According to the release, “From July 2017 through March 2021, Welsh, while serving in his capacity as an investment advisor employed by a large brokerage firm, misappropriated at least $2.86 million from five clients. Welsh, who had been entrusted to manage client funds responsibly, instead perpetrated a scheme to defraud the five clients by diverting money from their brokerage accounts to accounts under his control. Welsh then used the unlawfully obtained money to fund his gambling and to purchase high-end, luxury items for himself.”
Kenneth Welsh faces 25 years in prison and a $260,000 fine, or twice the gross gain or loss from the offense, whichever is greatest, for the wire fraud and adviser fraud count.
According to the complaint, Kenneth Welsh made 124 fraudulent transfers from client accounts with a total of $2,596,394 in transfers to accounts he controlled. The complaint also alleges that Kenneth Welsh arranged for cashier’s checks from customer accounts to be paid to businesses that sold coins, gold and other precious metals.
As of November 2023, according to Barrons, the SEC’s action against the broker are still pending. According to Barrons, “In a status letter filed last month, the SEC said it was planning to move for a default judgment against Welsh once the criminal matter, which “alleges essentially the same conduct as the SEC’s complaint,” has been resolved. At that point, the SEC said, the judge in the case “will be better able to assess the appropriate monetary remedies against Welsh.”
Kenneth Welsh Customer Complaints
He has been the subject of eight customer complaints between 2021 and 2022, one of which was closed without action, according to his CRD report:
February 2022. “Arbitration: Claimant alleges that Financial Advisor recommended eight Equity-Indexed Annuity Contracts that she alleges were not suitable for her. Complaint: Client’s attorney complains that monies were withdrawn from her brokerage account without her authorization in 76 transactions over a 27 month period. (12/1/2018-3/1/2021).” The case was settled for $5,850,000.
November 2021. “Customers verbally complained that the financial advisor recommended inappropriate investments, and also expressed concerns related to annual fees, and potential fraud. (5/13/2013-11/10/2021).” The case was settled for $30,531.61.
November 2021. “Client complained that the financial advisor opened a margin account without permission and also wrote checks from his account without permission. (9/11/2012-6/18/2021).” The customer sought $405,560 in damages, and the case was settled for $357,525.
August 2021. “Client verbally complained that financial advisor assured him that he would see a purchase of stock on his next statement. However, order was GTC and had not filled by the time next statement was issued. (3/24/2020-8/4/2021).” The case was settled for $21,355.27.
June 2021. “Attorney for complainant claims that funds were stolen by the financial advisor. (1/28/2016-1/21/2021).” The customer sought $225,000 in damages, and the case was settled for $346,040.02. The complaint took place while Kenneth Welsh was registered with Wells Fargo Clearing Services, LLC.
June 2021. “Client’s attorney complains that monies were withdrawn from her brokerage account without her authorization in 76 transactions over a 27 month period. (12/1/2018-3/1/2021).” The customer is seeking $1,857,001.59 in damages, and the case is currently pending. The complaint took place while Kenneth Welsh was registered with Wells Fargo Clearing Services, LLC.
April 2021. “Attorney for customer writes that the Financial Advisor is the likely perpetrator of a theft fraud on the client related to the alteration of checks, and payments and transfers from the client’s accounts. (9/11/2014).” The case was settled for $592,920.32. The complaint took place while Kenneth Welsh was registered with Wells Fargo Clearing Services, LLC.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Wells Fargo Clearing Services, LLC may be liable for investment or other losses suffered by Kenneth Welsh’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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