SEC charges former Georgia adviser with $1.86 million elder fraud

Agency claims Jay Costa Kelter used clients' money 'as own personal piggy bank'

Nov 14, 2017 @ 2:08 pm

By InvestmentNews

The SEC has filed charges against Georgia-based Jay Costa Kelter, a former investment adviser and broker, for defrauding three retired clients out of more than $1.86 million.

From September 2013 through 2016, Kelter made misrepresentations to three clients and used their money to fund expensive purchases for himself, the Securities and Exchange Commission charged in a complaint filed in federal court in Tennessee.

In 2013, after Mr. Kelter left Berthel Fisher where he was a broker, the SEC said he convinced three seniors to move their accounts to a new brokerage firm so he could continue to provide investment advice and trade on their behalf as head of his own advisory firm, BEK Consulting Partners. The clients opened new accounts at TD Ameritrade and gave Mr. Kelter access to the accounts.

(More news: Finra panel bars broker for defrauding elderly client)

As alleged in the complaint, Mr. Kelter sold securities in two of his clients' accounts to make unauthorized payments to his firm, and used the money "as his own personal piggy bank," buying a car, paying for personal day-to-day expenses, using one client's funds to return money to another client, and using the funds for futures and options trading in unrelated accounts.

(More news: Houston RIA charged in $1.9M elder swindle gets five years)

Mr. Kelter lives in Marietta, Ga., and was registered as an investment adviser representative in Florida from 1997 until November 2010. The SEC said he continued to seek registration as an investment adviser representative in Georgia until 2013, and since September 2013 has acted as an unregistered investment adviser. His BEK Consulting Partners filed for voluntary dissolution this past February.

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