Soreide Law Group is investigating possible investor claims against Doug Marshall McKelvey (CRD: 4502849, Southlake, Texas). Evidently, DOJ and SEC filed legal actions against the securities broker, who worked for Morgan Stanley, alleging money laundering and misapproprpiation. Here is a brief summary of the allegations against McKelvey.
Doug McKelvey admitted to breaking federal laws in the Eastern District of Texas, the U.S. Attorney’s Office confirmed. McKelvey apparently pleaded guilty to money laundering charges on June 6, 2023.
Court evidence purportedly revealed that between 2009 and 2022, McKelvey, while working as a financial advisor and vice president at Morgan Stanley, took $1.5 million or more from client accounts. These funds were meant to be invested on clients’ behalf. However, McKelvey allegedly made use of this money to cover personal expenses such as vacations, dining out, beauty salon visits, and more.
Evidently, McKelvey could face as much as 10 years in a federal prison.
Also, SEC filed Complaint: 4:23-cv-564 on June 6, 2023 with the intent to impose sanctions against Doug McKelvey for infractions. SEC claims that McKelvey misappropriated over $1.7 million from two elderly people's accounts, referred to as Client A and Client B, when he was their financial advisor at a large financial institution. This institution was registered with the SEC for both trading and providing financial advice.
McKelvey allegedly carried out his activities by taking money from these clients' accounts at the financial institution, and using it to pay off credit card bills that he or his wife racked up on personal expenses.
Supposedly, at first, McKelvey was mostly writing unauthorized checks from Client A's account at the financial institution to cover these credit card bills. The next year, he allegedly started making these payments by setting up unauthorized transactions that would pull money directly from the clients' accounts at the financial institution through the credit card companies.
In some cases, it's claimed by the regulator that McKelvey first moved the money illegitimately from the clients' accounts into a trust account that he owned and controlled. He would then allegedly use this money to pay off the credit card bills via these transactions.
Supposedly, McKelvey sold investments from the clients' accounts just before he made these illegitimate transfers to cover his credit card bills, so that there would be cash for him to steal. In other instances, he's accused of taking money by writing checks from Client A's loan account, which was secured by Client A's investment account.
The SEC alleges that because of all these actions, McKelvey broke the law, specifically, the Exchange Act Section 10(b) and Rule 10b-5.
Notably, a Morgan Stanley client filed FINRA Arbitration: 23-00381 about Doug McKelvey. Namely, the client alleged that McKelvey misappropriated funds. Because of this, the client allegedly sustained damages. Therefore, on May 22, 2023, Morgan Stanley settled this matter by paying the client $450,000 in damages.
Particularly, a client of Morgan Stanley Smith Barney LLC contested Doug McKelvey’s sales practices by filing FINRA Arbitration: 22-00950. Allegedly, McKelvey misappropriated funds. It appears that McKelvey caused the client to sustain damages. Therefore, Morgan Stanley Smith Barney LLC opted to settle the matter on September 26, 2022, by compensating the client in the amount of $1,400,000.
Also, on August 26, 2022, FINRA issued Letter of Acceptance, Waiver, and Consent No. 2022074899601 sanctioning Doug McKelvey for infractions. Specifically, McKelvey was barred. Notably, FINRA alleged that McKelvey failed to provide information and documents to FINRA when it investigated possible violations of FINRA rules.
Specifically, a client of UBS Financial Services Inc. contested Doug McKelvey’s sales practices, according to a complaint. Allegedly, McKelvey recommended investments which poorly performed. Supposedly, McKelvey caused the client to sustain damages on auction rate securities. Therefore, UBS Financial Services Inc. opted to settle the matter on December 23, 2008, by compensating the client in the amount of $175,000.
McKelvey worked for Morgan Stanley as a securities broker from June 2009 to May 2022.
Have you sustained damages because of broker Doug McKelvey? If you have, contact Soreide Law Group at (888) 760-6552 and talk with a securities lawyer concerning a potential recovery of your investment losses. Soreide Law Group, who has successfully recovered money for hundreds of investors across the United States, represents clients on a contingency fee basis and advances all costs. McKelvey and brokerage firms McKelvey worked for deny any and all accusations of sales-related misconduct.
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