Court Sentences Michael Donnelly to 99 Months Imprisonment and $1.99 Million in Restitution
The Securities and Exchange Commission (“SEC”) announced today that, on April 11, 2016, a federal court in Philadelphia, Pennsylvania sentenced Michael Donnelly of Lecanto, Florida, to 99 months imprisonment, to be followed by three years of supervised release, and the payment of restitution in the amount of $1.99 million. Donnelly is the former president of Wilmington, Delaware-based Coastal Investment Advisors Inc. and its affiliated broker-dealer. Donnelly pleaded guilty to securities fraud and wire fraud in December 2015.
The SEC charged Donnelly in a parallel action filed in October 2015. According to the SEC’s complaint, from 2007 through August 2014, Donnelly took funds from elderly and unsophisticated advisory clients and brokerage customers and, instead of investing the money as promised, used it to pay for his own expenses. Donnelly concealed his scheme by providing investors with false account statements, trade confirmations, and other untrue information that purportedly reflected their investment holdings and repeatedly told investors that their fictitious “investments” were performing well. Donnelly agreed to settle the SEC’s charges by consenting to a final judgment that permanently enjoined him from future violations of the antifraud provisions of the federal securities laws and agreed to disgorge his ill-gotten gains of $1.99 million and prejudgment interest of $365,723, which was deemed satisfied upon the entry of the order of restitution in the parallel criminal case. He also consented to an SEC order permanently barring him from the securities industry.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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