Broker banned with 37 client complaints hit with SEC fraud charges
What would you like to know
- The ex-broker is said to have defrauded at least 100 clients, most of them seniors.
- He was previously fired by Raymond James and then voluntarily resigned from Alliance Global Partners while under investigation.
- FINRA has excluded him from the industry after refusing to cooperate with its investigation into his actions.
Former broker who was banned from the industry by the Financial Industry Regulatory Authority and has been the subject of 37 disputes with clients has now been accused by the Securities and Exchange Commission of defrauding at least 100 advisory clients .
The 37 disputes were all included in the disclosures of Michael F. Shillin’s report on FINRA’s BrokerCheck website in 2020 (six of them) or 2021 (the remaining 31), after it was terminated by Raymond James Financial Services on May 21, 2018, and voluntarily resigned from Alliance Global Partners on October 2, 2020, while under investigation for alleged securities violations. Four were closed without action.
In the litigation, most of which is still pending, Shillin is accused of making a wide range of misrepresentations to clients, including:
- By claiming that he had purchased securities in the claimants’ accounts when he had not, and by presenting claimants with documents leading them to believe that the securities had been purchased.
- Telling clients that he bought SpaceX shares with their funds when he didn’t.
- Say he would pass a client’s life insurance policy (and separate from the client’s wife) from State Farm to John Hancock. The wife’s policy was changed, but the documentation the client received regarding her policy change appeared to be tampered with and JH said the client had no policy with it, according to BrokerCheck.
- Providing clients with forged 1099 forms for 2019, forcing clients to complete an inaccurate tax return. Clients also said they took more money out of an IRA in 2019 than they would otherwise have based on Shillin’s advice and misrepresentation that the interest on the bonds they held in their individual accounts were tax exempt.
- Making false statements and giving bad advice regarding the viability of a life insurance policy taken out in 1988 and the resolution of a claim by one of the beneficiaries of that policy.
- Fail to inform applicants that there were limits on penalty-free withdrawals from 401 (k) accounts that had been built into an IRA and misrepresent to applicants that they could withdraw from their IRAs when withdrawals were in prohibited transactions.
FINRA banned Shillin in December after refusing to produce any information or documents or formally testify as requested by FINRA staff – a surefire way to be banned by the industry’s self-regulator.
Without admitting or denying FINRA’s findings, Shillin signed a letter of acceptance, waiver and consent from FINRA on December 14, agreeing not to be associated with any FINRA member company at all levels. FINRA signed the letter on December 18.
In the SEC’s complaint, filed Thursday in U.S. District Court for the Western District of Wisconsin, the SEC alleged that Shillin, 32, of Appleton, Wisconsin, fabricated documents and made false statements to individuals. clients, many of whom were seniors, while acting as an investment advisor. .
Raymond James declined to comment on Monday. AGP did not immediately respond to a request for comment.
“A myriad of lies”
Shillin misrepresented that some clients had successfully subscribed to an initial public offering or pre-IPO stocks in leading companies when they had not, and lied to clients about the real value of their investment portfolios, according to the SEC.