A Missouri man who worked for a legitimate investment business near St. Louis sold unregistered securities in a Wisconsin-based, time-share “resort” business to elderly clients, Missouri officials said.
The securities came in the form of “unregistered real estate investments,” the officials said.
James McClellan Jr., of Chesterfield, never told 18 Missouri investors — at least six of whom were in their eighties — that the time-share business was experiencing financial difficulties and that the investments were not offered through his employer.
McClellan was a managing member of the out-of-state time-share business, the state charged. Officials identified the business as Meadow Ridge of Door County LLC, of Egg Harbor, Wisc.
McClellan now has been banned from the securities business by the state and assessed a penalty of $120,000. His former employer, Huntleigh Securities Corp., also was assessed a penalty of $120,000 for failure to supervise McClellan, who conducted “off the books” securities transactions, the state said.
“It is unacceptable for financial professionals to misuse their clients’ trust,” Missouri Secretary of State Robin Carnahan said. “My office made sure that this broker won’t be able to work in the industry in Missouri again and that his employer knows how to better supervise its employees.
Carnahan’s office called McClellan’s deal a “shady real estate scheme” into which investors had plowed more than $4.4 million.