The SEC has won a final judgment against an imprisoned former LPL Financial advisor who stole more than $600,000 from a retired client.
The U.S. District Court for the District of Connecticut yesterday entered the final judgment, which imposed a permanent injunction against Matthew O. Clason and ordered him to pay disgorgement and prejudgment interest totaling $634,472.
Clason, 41, of Cheshire, Conn., was sued by the SEC for defrauding a 73-year-old female client. Clason pleaded guilty to criminal charges connected to the fraud in May 2021. He was sentenced in December to 30 months in prison and ordered to pay $639,580 in restitution. The criminal charges were brought by the U.S. Attorney's Office for the District of Connecticut.
The SEC alleged that he violated the antifraud provisions of the Investment Advisers Act of 1940.
According to the SEC complaint, from about December 2018 to August 2020 Clason managed the client’s investment in five accounts, which as of July 31, 2020, totaled $482,000. The complaint, however, said that the client believed she had about $1 million under management with Clason as of August 2020.
The complaint said the client, who did not drive and had limited mobility and other health conditions, considered Clason a “good friend.” They would meet often, and he would drive her to various appointments and run errands for her. They also shared a joint checking account, which they opened in 2018 so that Clason would have access to the account for investment purposes, the complaint said.
The complaint said that at the client’s request, Clason would occasionally withdraw a few hundred dollars and deliver the money to her. But without her knowledge or authorization, Clason began to move money out of the client’s advisory account and at least one other account into the joint bank account. He funded the transfers by repeatedly selling securities in the advisory account and transferring proceeds to the joint bank account, the complaint said.