According to the Columbus Dispatch, former broker, Jeffery Kelly, was sentenced to 5 years in prison for operating a Ponzi scheme. Kelly who was indited on 17-counts, pled guilty last year to to wire fraud and interstate transportation of a security taken by fraud.
Kelly allegedly took more than $1.5 million from investors between 2006 and 2011. Kelly allegedly operated his scheme through a number of businesses he operated near Columbus, Ohio. Some of his victims included family, friends, and fellow church members.
Victims purportedly thought their money was being invested in an variety of securities which included stocks, annuities, and REITs. However, the money was spent on personal and business expenses, as well as purported payments to earlier victims.
Although Kelly was ordered to pay restitution, it is unlikely that the victims will receive payment from Kelly to cover their total losses. As such, The White Law Group is investigating the liability that Kelly’s employers may have for failure to properly supervise him and his activities.
Brokerage firms have a supervisory responsibility to monitor the business activities of their employees. When a broker, like Jeffery Kelly, is guilty of securities fraud the brokerage firm can be liable for negligent supervision and responsible for investment losses.
According to Kelly’s FINRA BrokerCheck Report, during the relevant time we worked with three brokerage firms, Woodbury Financial Services, WPR Investments, and Questar Capital Corporation.
If you are a victim of Jeffrey Kelly and would like to discuss your ability to file a FINRA arbitration claim to recover your investment losses, please call the securities attorney of The White Law Group at (312)238-9650 for a free consultation.