ALTOONA, Wis. (WEAU) – Former Altoona-based financial analyst Michael Shillin is facing federal civil charges for the actions his former clients say robbed them of their financial futures and, in some cases, their health.
The Securities and Exchange Commission filed its case in the Western District of Wisconsin on Thursday, September 23.
In the filing, investigators say Shillin, while acting as a financial advisor, fabricated documents and lied to clients about the true value of their investments. In addition to claims of defrauding clients by taking money to make non-existent investments he was also paid hundred of thousands of dollars in commissions for the work he claimed to do on his clients’ behalf.
The claims made by the S.E.C. accuse Shillin of defrauding at least 100 clients, many of whom are described as elderly. According to the Department of Justice “elderly” refers to a person age 60 years or older. There are three counts listed in their filing: Violations of Section 17(a) of the Securities Act; Violations of Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5; and Violations of Advisers Act Sections 206(1) and 206(2).
Some of the results of Shillin’s failure as a financial analyst and insurance agent are described in the SEC complaint, “In the course of selling a life insurance policy, told his [Shillin’s] client it contained a long-term care benefit. The client, now suffering from stage IV cancer, learned there was no such policy or benefit only after his diagnosis.” For one of Shillin’s investment clients, the SEC says the reality of Shillin’s betrayal did not come until after he made the decision to retire early—after Shillin claimed the man was, “$450,000 richer. Shillin had explained the money was the profits from Shillin’s purchase of Space Exploration Technologies Corp. or “SpaceX” stock for the client. Only later did the investor learn the truth: The SpaceX stock and the resulting nest egg were figments of Shillin’s deception.”
The filing goes on, “These are only two examples of Shillin’s myriad lies and the resulting suffering they have caused so many of his clients. Shillin went to great lengths to deceive his clients. He even set up an online portal for his clients to monitor their portfolio of securities and profits – much of which, as we now know, were pretend.”
Investigators claim Shillin started misleading clients in 2014 when he worked for another financial advising firm. One of the misleading actions came in 2018 when Shillin was terminated from the firm and according to the filing, “He falsely told clients that his departure was voluntary. Many clients would have fired him had they known the truth, and thus would have refused to continue paying him advisory fees.”
If found guilty of the charges brought by the SEC Shillin faces being barred from certain positions that deal with securities; repaying the clients he is accused of defrauding and/or face civil penalties.
Public records shows Shillin Wealth Management received a Paycheck Protection Loan in the amount of $331,800 in April 2020. In the loan application, the company claimed to employee 14 people. The funds were set to be distributed three ways: $265,488 for payroll; $29,912 on utilities and $36,400 toward rent. Those records show that Michael Shillin received a Paycheck Protection Loan for $20,833 in April 2020 for his work as an independent contractor. Records do not show either loan as forgiven or repaid.
WEAU did reach out to Michael Shillin; he has yet to respond to our request.
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