The SEC today permanently barred a former investment advisor who is facing a trial later this year on federal fraud charges.
According to the SEC and the U.S. Attorney’s Office, Michael Shillin of Appleton, Wis., defrauded roughly 100 clients, many of them elderly, between August 2014 and October 2020.
“Shillin’s misrepresentations were wide-ranging, and included misstatements and omissions of material fact regarding the nature of his clients’ investments; false claims that he had invested clients’ funds in initial public offerings or pre-IPO stocks; false claims about the value of clients’ portfolios; and misstatements regarding Shillin’s termination from a previous employer,” today’s SEC filing said.
Shillin was criminally charged with nine counts of wire fraud and one count of bank fraud last year. His trial is scheduled to start in August in U.S. District Court. If convicted, he faces a maximum penalty of 20 years in prison for each wire fraud charge and a maximum of 30 years for the bank fraud charge.
Shillin worked from 2011 to 2020 as an investment advisor and registered representative with various SEC-registered advisory firms and broker-dealers, including Edward Jones, Raymond James and Alliance Global Partners, according to BrokerCheck. He also ran his own firm, Shillin Wealth Management, which as of the end of 2020 managed nearly 3,000 accounts with $135 million in assets under management, according to the indictment issued against him last year.
In one instance, a client retired earlier than planned because Shillin had told him a SpaceX investment had added $450,000 to his wealth—an investment that did not exist, the SEC stated. He told clients he had bought life insurance policies with long-term care benefits, when he hadn’t, but charged them commission payments as if he had. And he let clients believe they were living off the returns of their investments, when in fact they were eating away at their investment principal, the SEC said.
Shillin also allegedly falsified bank records to use a client account as collateral for two loans totaling $462,000, provided clients fraudulent tax documents to make them appear eligible for tax breaks though in fact they were ineligible, and set up a fake online portal for his clients to monitor their portfolios and profits, the indictment said.
Neither Shillin nor his attorney could be reached by press time.
According to court documents, Shillin defrauded clients of hundreds of thousands of dollars. On Nov. 29 of last year he filed for bankruptcy.
The SEC is the third oversight agency to bar Shillin from the industry. Finra barred him in December 2020 and the Wisconsin Department of Financial Institutions Division of Securities barred him in January 2021.