SEC Says Adviser Jay Kelter Conned $1.4M from Retiree

SEC Says Adviser Jay Kelter Conned $1.4M from Retiree

The U.S. Securities and Exchange Commission (SEC) and federal prosecutors allege that former investment adviser Jay Costa Kelter defrauded a retiree out of about $1.4 million. The complaint says he used the money to pay off other clients and family and to buy a Bentley.

Kelter Indicted and Sued by SEC

In November 2017, former financial adviser Jay Costa Kelter was indicted and subsequently sued by the SEC in Tennessee federal court for allegedly lying about working at brokerage firm TD Ameritrade. It was there that Kelter purportedly convinced 75-year-old widowed retiree to open accounts, which he then took advantage of. According to prosecutors, Kelter allegedly went on to make unauthorized transactions, transferred client funds to himself and his former firm, BEK Consulting Partners LLC, and paid off other clients, including his stepmother. Kelter was indicted by federal prosecutors on 22 counts of wire fraud, mail fraud and securities fraud. For each count he faces up to 20 years in prison and up to a $5 million fine if convicted.

According to the SEC complaint, Kelter began providing financial advice to the client in 2011. He convinced the client to invest “a substantial portion” of her life savings—more than $3.1 million—with him, despite the client’s dependence on investments for income. From 2013 to 2016, Kelter then allegedly stole more than $1.4 million from her. After the client became aware of the misappropriated funds, Kelter signed an agreement promising to return the $1.4 million in September 2015. Almost a year later, in November 2016, the client sued Kelter in Tennessee federal court over the investments he made on her behalf.

The client’s lawsuit was stayed after Kelter filed for Chapter 7 bankruptcy in February.

Kelter Also Allegedly Defrauded Other Retiree Clients

The SEC also alleged in a separate civil complaint that Kelter violated federal securities law. The complaint states that Kelter defrauded several other retirement-age clients out of thousands of dollars. That money was spent on a family vacation, rent, and day-to-day living expenses.

Have You Lost Money with Jay Costa Kelter?

If you believe you have been the victim of Jay Costa Kelter or an investment scheme, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered over $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los AngelesNew YorkWest Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or free consultation to review your rights and options.

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TD Ameritrade ETF Platform Expanded, Will Charge Fees in 90 Days

TD Ameritrade ETF Platform Expanded, Will Charge Fees in 90 Days

TD Ameritrade ETFs Removed from Platform

TD Ameritrade has announced that it will expand the number of exchange-traded funds (ETFs) offered to 296 and also remove some ETFs from its no-transaction-fee platform. The firm said that the Vanguard and iShares Core ETFs would no longer be available without a transaction fee, beginning November 20.

At first, the firm said the ETFs would be removed in 30 days, but industry criticism from several notable executives resulted in a change of course. Responding to the feedback from upset brokers, TD Ameritrade is instead tripling the amount of time it will allow advisers to continue trading Vanguard and iShares Core ETFs for free, pushing the new date to January 19, 2018. The decision comes just one week after the initial announcement.

Financial Advisers Upset About TD Ameritrade ETF Program

A number of securities professionals have been outspoken about TD Ameritrade’s announcement, including Michael Kitces, partner and director of research at Pinnacle Advisory Group and co-founder of the XY Planning Network. Kitces says that charging fees to trade the Vanguard and iShares Core ETFs would be hard on younger investors who regularly make smaller investments and would need to rebalance existing portfolios with new funds.

Though TD Ameritrade acknowledged negative feedback about the change, Tom Nally, president of TD Ameritrade Institutional, notes that critics are overlooking the advantages of other ETFs, such as State Street SPDR ETFs, that have been added to the TD’s platform.

“These are the lowest-cost broad index-tracking ETFs,” he said. “The domestic funds are 18% cheaper than Vanguard’s, and on the international front they are 33% cheaper than Vanguard’s, which we think will be attractive to advisers and their clients.”

TD Ameritrade ETF Commission-Free Offering Triples

Along with this announcement, TD Ameritrade expanded its commission-free ETF platform, nearly tripling the offerings from 100 to 296. Effective October 17, 2017, independent registered investment advisor (RIA) clients and individual investors now have access to one of the largest selections of commission-free ETFs in the industry, as well as the most non-proprietary, commission-free ETFs.

In a release circulated by the firm, the participating ETF providers are AGFiQ QuantShares, First Trust Portfolios, iShares ETFs, J.P. Morgan Asset Management, PowerShares (Invesco), ProShares, State Street Global Advisors and WisdomTree.

The expanded program includes ETFs that cover 77 Morningstar categories and include extremely low-cost ETFs in 15 core investment strategies. TD Ameritrade began offering commission-free trading in ETFs in 2010.

ETFs Often Misunderstood by Stockbrokers

There have been several controversies related to retail investments in ETFs. The Financial Industry Regulatory Authority Inc. (FINRA) recently ordered Wells Fargo to pay more than $3.4 million in restitution to customers affected by unsuitable recommendations of volatility-linked ETFs.

FINRA has found a lack of supervision and broker misunderstanding to be leading causes of ETF investor losses.

In related TD Ameritrade news, Dimond Kaplan &Rothstein, P.A. is pursuing FINRA arbitration claims against TD Ameritrade on behalf of an elderly investor who suffered stock option investment losses as a result of services rendered through third-party investment advisor Sheaff Brock.

The TD Ameritrade customer got to Sheaff Brock through TD Ameritrade’s AdvisorDirect program and suffered significant losses in a risky put income options strategy.

Did You Lose Money as a Result of TD Ameritrade ETFs?

If you believe you have lost money in ETFs trades, you may have certain legal rights that require your immediate attention.

Call an Investment Fraud Attorney Today

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.

With offices in Los AngelesNew YorkWest Palm Beach and Miami, our investment fraud attorneys represent clients nationwide and may be able to help you recover your investment losses.

Contact an investment fraud attorney at Dimond Kaplan & Rothstein, P.A. today to schedule an appointment or consultation to review your rights and options.

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