Alabama Investor Contends The Daughtry Group Owner Unsuitably Invested His Retirement Funds
Another investor has stepped forward to file a Financial Industry Regulatory Authority (FINRA) arbitration claim against Kestra Investment Services over financial losses sustained while working with the firm’s former broker, James Blake Daughtry. The latter ran a local office in Dothan, Alabama known as The Daughtry Group. FINRA barred Daughtry and Kestra fired him last year.
The claimant, a senior investor, contends that Kestra failed to properly supervise Daughtry, whom he accuses of making fraudulent and unauthorized transactions in his account. As a result, this retiree lost $232K. He is seeking up to $500K in damages.
Our investment fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) are representing this investor in his FINRA arbitration claim against Kestra Investment Services. We are also pursuing other investor claims against Kestra involving Daughtry. If you are one of these investors, call (800) 259-9010 today.
Daughtry Accused of Selling Away, Making Unauthorized Transactions Involving Graysail
The claimant is an unsophisticated investor who sought help managing his IRA. Daughtry proceeded to make unsuitable investment recommendations to this customer, including setting up his IRA with an administrative firm called Equity Trust and the now-defunct registered investment advisor, Graysail.
The claimant was unaware of any of these moves, which ended up with him lending nearly all his assets to an entity called Small World Capital allegedly operated by a Mr. Smalls. Daughtry sold away from Kestra, recommending a product that the firm had not approved.
In addition to securities fraud and failure to supervise, this Alabama investor is also claiming the following:
- Negligence
- Misrepresentations and omissions
- Unauthorized transactions
- Unfair trade and deceptive practices
- Elder financial abuse
- Other breaches of duty
Daughtry worked 20 years in the industry. There are three other pending customer disputes noted on his BrokerCheck, including:
- 8/2020: This claimant, seeking nearly $232K in damages, contends that Daughtry allegedly solicited clients to set up an account with a third-party registered investment adviser that, according to the Securities and Exchange Commission (SEC), committed fraud. While not stating names specifically, this case likely involves Graysail.
- 7/2020: Making similar allegations, as the claim noted above, this investor is seeking $1.5M in damages.
- 6/2020: The claimant is alleging misrepresentations, unauthorized transactions, breach of fiduciary, and negligence. They are seeking $65K in damages.
Other firms where James Daughtry used to be a registered broker include Ameriprise Financial Services, Securities America, NFP Securities, Sterne Agee Financial, and Wachovia Securities, Liberty Securities, and Southtrust Securities.
Kestra and Its Duty to Supervise
Rather than set up branch offices where brokers work under the supervision of a manager, Kestra runs offices off supervisory jurisdiction (OSJs). This entails hiring solo brokers who are responsible for setting up and covering the costs of their own offices, such as The Daughtry Group in Dothan. This arrangement, however, did not exempt Kestra Investment Services from its obligation to properly supervise James Daughtry.
Experienced Stockbroker Fraud Attorneys
SSEK Law Firm has fought for thousands of investors, recovering many millions of dollars on their behalf. We are here to protect investors and zealously advocate for their financial recovery. Contact us at (800) 259-9010 or by filling out our contact form today.