David Bain is the attorney who filed the suit. (Courtesy photo)

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.