Edward E. Matthes

Litigation Release No. 25110 / June 9, 2021

Securities and Exchange Commission v. Edward E. Matthes, 2:20-cv-00125-LA (E.D. Wis. filed January 28, 2020)

United States v. Edward E. Matthes, 20-cr-0220-bhl (E.D. Wis. filed November 25, 2020)

Edward E. Matthes, who was charged by the SEC in January 2020 with defrauding his mostly elderly retail brokerage customers and investment advisory clients, has been sentenced in a parallel criminal case to 63 months in prison and ordered to pay restitution to his victims of more than $2.36 million.

The criminal charges against Matthes stem from the same misconduct alleged in the SEC’s complaint. The SEC’s complaint alleged that Matthes convinced his brokerage customers and advisory clients to invest in what he described as a safe investment that would earn a guaranteed minimum yield of 4% per year. As alleged in the complaint, the purported investment did not exist, and Matthes stole approximately $1.4 million for his personal use. Matthes allegedly stole an additional $1 million by making unauthorized sales and withdrawals from his customers’ variable annuities. To cover up his fraud, Matthes allegedly created fake account statements and paid approximately $170,000 in Ponzilike payments.

The SEC’s litigation against Matthes is ongoing. On January 30, 2020, the district court entered a judgment by consent permanently enjoining Matthes from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and ordering him to pay disgorgement, prejudgment interest, and penalties in amounts to be determined by the court at a later date.

The SEC’s investigation was conducted by Som P. Dalal, Jean M. Javorski, and Anne C. McKinley of the Chicago Regional Office. The litigation is being handled by John E. Birkenheier, Ms. McKinley, and Mr. Dalal. The SEC appreciates the assistance of the Federal Bureau of Investigation, the U.S. Attorney’s Office for the Eastern District of Wisconsin, and the U.S. Department of Labor, Employee Benefits Security Administration.



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