SEC Stops Broker’s Ongoing Theft of Retirees’ Investment Funds and Obtains Asset Freeze

WASHINGTON, Oct. 30 -- The Securities and Exchange Commission issued the following litigation release (No. 24328):

* * *

Securities and Exchange Commission v. Sean Kelly et al., No. 1:18-cv-04939-TCB (N.D. Ga., filed Oct. 26, 2018)

The Securities and Exchange Commission today announced that it has obtained a court order halting an ongoing fraud perpetrated by a registered stock broker and several companies he controlled.

The SEC's complaint alleges that Sean Kelly used his companies, Lion's Share Financial of East Cobb, Inc., Lion's Share & Associates, Inc., and Lionsshare Tax Services, LLC, to raise at least $1 million from 12 investors, including elderly retirees, promising that he would invest their funds in a variety of investment products including private placements and real estate funds. Rather than investing the money, Kelly spent it on personal expenses including Super Bowl tickets, luxury vacations, and cash withdrawals. As alleged, Kelly continued to steal money from investors even after having received an SEC subpoena, and did not show up for his scheduled testimony after informing the SEC's staff that he would show up and "come clean."

In a parallel action, on the same day, the U.S. Attorney's Office for the Northern District of Georgia filed criminal charges against Kelly and arrested him.

The SEC's complaint, filed on October 25, 2018 in U.S. District Court for the Northern District of Georgia, charges Kelly with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment Advisers of 1940. The SEC's complaint charges Kelly's companies with violating certain of those same statutes, or aiding and abetting certain of Kelly's (or his other companies') underlying violations.

On October 26, 2018, the court granted the SEC's request for an asset freeze, temporary restraining order, and an accounting. The SEC seeks preliminary and permanent injunctions, disgorgement of allegedly ill-gotten gains plus interest, and civil penalties against Kelly. The Commission appreciates the assistance of the U.S. Attorney's Office for the Northern District of Georgia and the Atlanta Field Office of the Federal Bureau of Investigation.

SEC Complaint (https://www.sec.gov/litigation/complaints/2018/comp24328.pdf)

Order Granting Temporary Restraining Order, Freezing Assets, and Granting Other Relief (https://www.sec.gov/litigation/complaints/2018/tro24328.pdf).