According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker James Daughtry (Daughtry), previously associated with Kestra Investment Services, LLC, has at least 7 disclosable events. These events include 5 customer complaints, 2 regulatory events, alleging that Daughtry recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on September 29, 2022.
On 9/28/22 an Order to Bar (OB-2022-0023) was issued against the Respondent by Alabama Securities Commission. OB issued due to Respondent failed to make full & complete disclosure that clients’ accounts were being sold, moved to Graysail & lack of respondent’s involvement with their accounts. For more info contact the Alabama Securities Commission at 334-242-2984
FINRA BrokerCheck shows a settled customer complaint on June 16, 2021.
Plaintiff alleged losses in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $200,000.00 on April 30, 2021.
Plaintiff alleged losses in excess of $200,000 in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $231,752.00 on August 14, 2020.
Plaintiff alleged losses of approximately $231,752 in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $1,500,000.00 on July 23, 2020.
Plaintiffs allege losses of approximately $1.5 million in connection with Daughtry alledgly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $65,000.00 on June 22, 2020.
Client alleges unauthorized transactions, misrepresentations, negligence and breach of fiduciary duties.
FINRA BrokerCheck shows a final customer complaint on March 18, 2020.
Without admitting or denying the findings, Daughtry consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation into potentially fraudulent and unauthorized transactions in customers’ accounts.
Financial Advisors providing advice to retail investors are required to adhere to the SEC’s Regulation Best Interest (Reg BI). Reg BI applies a ‘best interest’ standard for broker-dealers and their associated people. This Reg BI standard of care applies to registered representatives making recommendations to customers in the purchase, sale, or exchange of securities or the implementation of investment strategies involving securities and non-securities. The rule also applies to the handling of opening accounts such as account transfers and types of accounts being recommended to be opened. This standard applies when a registered representative is providing investment advice through making recommendations customers and covers securities transaction, investment strategies, and recommendations concerning advice on opening of an account or accounts.
The care obligation also requires the broker to address the client’s specific needs through obtaining specific investment profile information on the client. The associated person typically will ask the customer for information such as the investor’s risk tolerance or ability to withstand account value declines or increases; experience with investments available; investment objectives and goals; investment time horizon; liquidity needs; assets such as investment accounts held at other financial institutions; tax information; their age and retirement plans; and other information that a customer may want to provide to the advisor to help them to properly address the services needed. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest. There are different sub-parts of the Reg BI rule that financial professionals must comply with when providing advice. Among those is the duty of care obligation that mandates associated persons to evaluate investment options, review and be knowledgeable the risks and rewards of the investment or service, compare alternative investment products, and ensure that the overall investment strategy aligns with the client’s goals and is in their best interests.
Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest. In addition to specific investments being recommended, under Reg BI, a broker must also understand the type of account that their client would need in order to meet their care obligations. The SEC has stated that the type of securities account an investor has can greatly affect a customers’ costs and overall investment returns. Further, different account types can offer and support different features, products, securities, or services, and account type would not be appropriately applied in a one size fits all manner.
Daughtry has been in the securities industry for more than 20 years. Daughtry has been registered as a Broker with Kestra Investment Services, LLC since 2015.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.