Barred Kestra Stockbroker Accused of Unauthorized Trading
Our broker misconduct lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are currently speaking with former customers of ex-Kestra Investment Services broker James Blake Daughtry. He was recently barred by the Financial Industry Regulatory Authority (FINRA). The self-regulatory organization (SRO) issued the ban after Daughtry refused to testify during its investigation into allegations that he may have engaged in transactions that were potentially “fraudulent and unauthorized” in a number of customers’ accounts. Also, in the wake of FINRA’s order, Kestra fired him this month.
Daughtry consented to FINRA’s bar but without denying or admitting to the SRO’s findings. His BrokerCheck record notes that he worked 20 years in the industry. He is both an ex-broker and a former investment adviser. Aside from five years with Kestra, Daughtry has previously been a registered stockbroker with Ameriprise Financial Services (AMP), Securities America, Stern Agee Financial Services, Wachovia Securities, Southtrust Securities, and Liberty Securities.
Currently, there are no customer disputes listed on Daughtry’s record. However, unauthorized trading is fraudulent trading and can be grounds for a FINRA arbitration claim by a customer if losses occurred.
Unauthorized Trading in Discretionary and Non-Discretionary Accounts
There are typically two kinds of customer accounts: discretionary accounts and non-discretionary accounts. While brokerage firms are allowed to trade in a client’s discretionary account without first getting the customer’s approval before each trade, these transactions must still fit within the parameters established between the broker-dealer and the customer. Trades that occur outside those boundaries are considered unauthorized trading.
If the customer has a non-discretionary account, the broker needs to get their approval before making any trade. To do so otherwise is considered unauthorized trading.
However, at first glance, certain instances of unauthorized trading by a broker may not seem like they were unauthorized at all. It doesn’t matter, they are still fraudulent if done without the customer’s consent. Here are a few examples:
- Your broker makes a trade in your account without getting your permission and then lets you know afterwards, claiming there wasn’t enough time to inform you beforehand.
- Your stockbroker discussed using a certain investment strategy or buying a particular investment and then went ahead and bought securities without getting your permission prior to each transaction.
- Your registered financial representative submitted “unsolicited” trades on your behalf, making it seem as if you were the one who had requested the transactions.
Broker Fraud Lawyers
An unauthorized trading case is not the type of broker fraud claim that you want to pursue without experienced legal help. Please contact SSEK Law Firm if former Kestra Investment Services broker James Blake Daughtry was your financial representative and you suffered losses that you now suspect may be due to fraud or negligence. We can help you explore your legal options, and we work with investors throughout the US.
Over the years, SSEK Law Firm has successfully pursued many unauthorized trading claims against brokers and the brokerage firms whose failure to supervise allowed for the fraudulent actions to occur. Your initial consultation with one of our unauthorized trading attorneys is free. Should we decide to work together, all legal fees would only come out of any financial recovery obtained in your behalf.