Massachusetts Secretary of the Commonwealth William F. Galvin has filed civil charges accusing Oakdale Wealth Management financial advisors Michael O’Keefe and James Daly of using over $11M of client assets to make risky bets on oil and gas investments. The state regulator accused them of employing a “one-size-fits-all” approach when managing investors’ money. Oakdale Wealth Management is a registered investment advisor (RIA) that the two men founded in 2006.
According to Galvin’s complaint, Daly and O’Keefe gambled away clients’ money in the oil and gas market. The two investment advisors are accused of spending more than $11M of investors’ funds to make 2000 energy-related investment purchases, including Master Limited Partnerships (MLPs). Their victims included a number of senior citizens who were saving money to retire, blue-collar workers, a charitable organization, and a widow.
The Massachusetts regulator contends that even though the risk tolerance levels, investment goals, and financial situations of Oakdale’s clients varied, the two financial advisers made the decision to place almost all of them in high-risk, publicly traded investments related to energy, including oil and gas investments. This, even as the firm’s written policies and procedures articulated that investment decisions would be specifically tailored according to each client’s goals and the degree of risk they could handle.
Daly is accused of exercising his discretionary trading authority over the investment advisory firm’s clients. He allegedly over-concentrated almost all of the firm’s clients in these energy investments, regardless of their net worth, risk tolerance level, and age. As a result, about “30% of each clients’ total portfolio” was made up of these investments.
Unfortunately, by 2015, when nearly every Oakdale client’s accounts had purportedly become heavily concentrated in energy-related investments, many of the issuers of these investments either went bankrupt or plunged in value due to a “downturn in energy prices.” Because of this, contends Galvin’s office, many of the RIA’s clients, including bus drivers, a construction worker, and retired cops, lost a substantial amount of their retirement funds. One widow lost the majority of her funds that was supposed to support her for the remainder of her life. A charitable organization that gave Oakdale $1M to oversee lost over $354K.
The Massachusetts regulator is alleging the following:
- Unsuitable investment recommendations
- Failure to act in clients’ best interests
- Failure by O’Keefe, as the Chief Compliance Officer, to reasonably supervise the RIA and Daly’s trading activities
- Failure to assess the risks involved with the energy investments and to review client portfolios for “concentration of assets”
- Failure by O’Keefe to stop Daly from over-concentrating the portfolios of investors that could only handle a low degree of risk in these high-risk energy investments
Investment Adviser Fraud
If Oakdale Wealth Management was your RIA and you lost money that you believe may have been due to either poor mismanagement on the part of Michael O’Keefe or James Daly or misconduct/negligence by another Oakdale Wealth Management adviser, please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today so that one of our investment adviser fraud lawyers can help you explore your legal options.