The former president of Coastal Investment Advisors and its affiliated broker-dealer agreed Monday to settle Securities and Exchange Commission charges that he stole nearly $2 million from his elderly clients over a seven-year period.
According to the SEC's complaint filed in federal district court in Philadelphia, Michael Donnelly, former president of Wilmington, Delaware-based Coastal Investment Advisors took money from elderly and unsophisticated investors and instead of investing it as promised, used it to pay for his own expenses, including rent, car payments, golf club membership dues, and his children's private school tuition.
Donnelly concealed his scheme from 2007 to August 2014 by providing investors with false account statements, trade confirmations, and other bogus information that purportedly reflected their investment holdings and repeatedly told investors that their fictitious "investments" were performing well.
"We will aggressively pursue and prosecute industry professionals like Donnelly who abuse their positions of trust to take advantage of their unsuspecting clients," Sharon Binger, director of the SEC's Philadelphia Regional Office, said in a statement.
