Lawsuit Seeks $400K for Investors Swindled by Marietta Stockbroker
Marietta stockbroker Sean Kelly, who operated several entities under the "Lion's Share" umbrella, was sentenced to five years in federal prison after pleading guilty to wire and securities fraud in January.
October 24, 2019 at 12:32 PM
4 minute read
In the wake of a guilty plea that sent a Marietta stockbroker and investment adviser to federal prison for five years for securities and wire fraud, a group of investors who were among those he defrauded is suing North Dakota-based brokerage house Capital Financial Investments for more than $400,000.
Sean Kelly, a broker and adviser who ran several financial entities under the "Lion's Share" moniker in Cobb County until the Securities and Exchange Commission shut him down last October for treating his companies "as his personal piggy bank," was accused of stealing more than $1 million from investors, many of them elderly or military veterans.
According to a complaint filed in the U.S. District Court for the Northern District of Georgia, Kelly was a registered broker with Capital between 2012 and 2017. He also was an agent for another firm, Center Street Securities, during the years he carried out his fraudulent activities.
But while Center Street "worked with its customers in the months after the SEC's action to identify the amounts Kelly had stolen and make its customers whole," the complaint said, Capital's response has been "to ignore first its customers and, later, their counsel."
The complaint, filed by Atlanta solo David Bain, said he has been requesting account documents and other materials from Capital since June to no avail, even after he told the firm he was drafting litigation.
Bain declined to discuss the litigation, which was filed on behalf of nine plaintiffs who lost at least $409,875 Kelly was supposed to invest. Two of them are in their 80s, and another is a cancer survivor whose money—about $50,000—largely came from a settlement with a drug company whose medication caused her cancer.
"Kelly used a variety of techniques to solicit customers, including offering free tax preparation services for veterans and free retirement planning seminars in assisted living facilities," according to the complaint filed last week. "As a result, many of these plaintiffs are very vulnerable individuals. They include octogenarians, widows, and people with disabilities, many of whom cannot afford the losses they have suffered."
The complaint names Capital Financial Services, Capital Financial Holdings and president and CEO Douglas Dihle as defendants and includes claims for breach of contract, breach of fiduciary duty, negligence and violation of the Georgia Uniform Securities Act. It also seeks punitive damages.
There was no answer to phone calls to Capital Financial Services, nor was there a response to an email including the complaint. A recorded message at the company's parent, Capital Financial Holding, said its last day of retail business was July 31; according to the SEC website, its registration was terminated on Oct. 8.
Kelly's arrest and charges were part of what the U.S. Department of Justice and Northern District U.S. Attorney BJay Pak termed the largest sweep of defendants accused of elder fraud in history, when more than 260 people were charged across the country.
According to the Justice Department, part of Kelly's scheme involved promising to invest his clients' money but instead spending it on "personal expenses including mortgage payments, Super Bowl tickets, vacations, and large cash withdrawals."
Kelly, 51, is serving his sentence at a minimum security prison camp in Montgomery, Alabama, according to the Board of Prisons website. He is scheduled to be released in September 2023.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All'Too Far, Too Fast': Miami Lawyers File MDL Against Robinhood Days Before Multibillion-Dollar IPO
4 minute readMiami Judge Sanctions Law Firm, Treasury Secretary Mnuchin's Former Bank for 'Frivolous' Foreclosure
4 minute readTrending Stories
- 1Call for Nominations: Elite Trial Lawyers 2025
- 2Senate Judiciary Dems Release Report on Supreme Court Ethics
- 3Senate Confirms Last 2 of Biden's California Judicial Nominees
- 4Morrison & Foerster Doles Out Year-End and Special Bonuses, Raises Base Compensation for Associates
- 5Tom Girardi to Surrender to Federal Authorities on Jan. 7
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250