(HedgeCo.Net) The U.S. Securities and Exchange Commission has charged a former New Jersey broker and investment adviser representative with stealing nearly $3 million from his advisory clients and brokerage customers, which he used to buy gold coins and other precious metals, and funneled to family credit card accounts that he controlled.

The SEC’s complaint alleges that Kenneth A. Welsh, 31, a former financial adviser at a large financial institution’s branch in Fairfield, New Jersey, misappropriated at least $2.86 million from the accounts of multiple clients and customers, some of whom were senior citizens.

Specifically, the complaint alleges that from January 2016 to January 2021, Welsh transferred funds from his clients’ and customers’ accounts to pay off balances in credit card accounts held in the names of his wife and parents. Welsh also allegedly caused checks to be fraudulently drawn on his clients’ and customers’ accounts. The complaint alleges that Welsh made at least 137 fraudulent transactions, and used the stolen funds to purchase gold coins and other precious metals, buy luxury goods, and make electronic fund transfers to himself.

The SEC’s complaint, filed in the United States District Court for the District of New Jersey, charges Welsh with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Section 17(a)(1) and (a)(2) of the Securities Act of 1933; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint seeks injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey announced criminal charges against Welsh.