SEC Bars Former Wells Fargo Advisor Kenneth Welsh After Criminal Conviction

Kenneth Welsh Permanently Barred from the Securities Industry

The U.S. Securities and Exchange Commission (SEC) has reportedly barred former Wells Fargo Clearing Services, LLC advisor Kenneth  Welsh (CRD #4657872) following his criminal conviction for stealing more than $3 million from clients.

According to a February 13, 2026 SEC order, Welsh is barred from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. The industry bar follows his guilty plea to federal criminal charges and the entry of a civil injunction related to a multiyear fraud scheme.

Welsh was employed with Wells Fargo Clearing Services from September 2012 until his termination in June 2021.

Criminal Conviction and Prison Sentence

In November 2024, Welsh pleaded guilty in federal court to:

• Four counts of wire fraud

• One count of investment adviser fraud

According to the U.S. Department of Justice, from July 2017 through March 2021, Welsh misappropriated at least $3 million from five clients while working as an investment adviser at a large brokerage firm.

Prosecutors alleged he used the stolen funds to:

• Fund gambling activities

• Pay personal credit card debts

• Purchase luxury goods

• Buy gold coins and precious metals

In July 2025, Welsh was sentenced to 44 months in federal prison.

The SEC’s 2026 order formally bars him from the securities industry, citing his criminal conviction and related civil injunction.

Details of the Alleged Misconduct

The SEC originally filed civil charges in October 2021, alleging that Welsh stole approximately $2.86 million through at least 137 unauthorized transactions between January 2016 and January 2021.

According to the SEC complaint, Welsh allegedly:

• Altered pre-signed client checks

• Directed funds from brokerage and advisory accounts into accounts he controlled

• Used accounts in his wife’s and parents’ names

• Misled clients into signing blank or pre-filled authorization forms

• Conducted unauthorized withdrawals, including dozens from a single client account

Some of the affected customers were described as elderly and financially unsophisticated.

The SEC order further stated that Welsh misappropriated client funds to pay off credit card accounts held in the names of family members for his personal benefit.

Customer Complaints and Settlements

Welsh’s regulatory record reflects multiple customer disputes filed between 2021 and 2022.

Settlement amounts reportedly ranged from approximately $20,000 to as much as $5.85 million. In one arbitration matter, a claimant alleged:

• 76 unauthorized withdrawals over a 27-month period

• Unsuitable annuity recommendations

Customer disputes and regulatory disclosures are important factors investors should review when evaluating a financial advisor’s background.

Employment History

According to publicly available FINRA records, Welsh was associated with the following firms during his securities industry career:

• 09/07/2012 – 07/08/2021: Wells Fargo Clearing Services, LLC (Fairfield, NJ)

• 06/01/2009 – 10/05/2012: Morgan Stanley Smith Barney LLC (Fairfield, NJ)

Potential Investment Recovery Options for Customers

When a financial advisor engages in fraud, unauthorized trading, or unsuitable recommendations, the brokerage firm may be held liable for failing to supervise the advisor properly.

Brokerage firms have a legal duty to:

• Supervise their registered representatives

• Monitor account activity

• Detect red flags

• Prevent unauthorized withdrawals

If a firm fails in these duties, investors may pursue claims through FINRA arbitration for negligent supervision, breach of fiduciary duty, or failure to supervise.

Free Consultation with The White Law Group

If you suffered losses investing with Kenneth Welsh or have concerns regarding unauthorized transactions, misappropriation of funds, or unsuitable investments, the securities attorneys at The White Law Group may be able to help.

With offices in Chicago, Illinois and Seattle, Washington, The White Law Group represents retail investors nationwide in cases involving broker misconduct, supervisory failures, and securities fraud.

For a free consultation with a securities attorney, please call (888) 637-5510.

The foregoing information is based on publicly available regulatory and court records.

For more information, please visit www.whitesecuritieslaw.com.

Frequently Asked Questions (FAQs)

1. Why was Kenneth Welsh barred by the SEC?

In February 2026, the SEC permanently barred Kenneth Welsh from the securities industry following his guilty plea to four counts of wire fraud and one count of investment adviser fraud. According to regulators, Welsh misappropriated more than $3 million from five clients while employed at Wells Fargo Clearing Services, LLC. He was sentenced to 44 months in federal prison, and the SEC determined that a permanent industry bar was in the public interest.

2. How did Kenneth Welsh allegedly steal money from clients?

According to the SEC’s complaint and subsequent order, Welsh allegedly conducted at least 137 unauthorized transactions between 2016 and 2021. Regulators stated that he redirected funds from client brokerage and advisory accounts into accounts he controlled, including accounts in his wife’s and parents’ names. Authorities further alleged he used stolen funds for gambling, personal debts, luxury purchases, and precious metals.

3. Can investors recover losses related to Kenneth Welsh?

Investors who suffered losses due to unauthorized withdrawals, fraud, or unsuitable investment recommendations may be able to pursue recovery through FINRA arbitration. Brokerage firms have a duty to supervise their financial advisors and monitor account activity. If supervisory failures occurred, the firm may be liable for investor losses. A securities attorney can review your account activity and determine whether you may have a viable claim.