The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker James Clay. According to his publicly available FINRA BrokerCheck report, James Clay has been the subject of a FINRA sanction.

James Clay was a Tennessee based securities broker. He worked in the securities industry for just seven years. During his career, he was registered with three different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

  • Edward Jones (2010-2012)
  • U.S. Bancorp Investments (2012-2014)
  • CUSO Financial Services (2014-2017)

The Allegations

James Clay was officially sanctioned by October 2017. The findings in the matter state that he allegedly engaged in an undisclosed and unapproved outside business activity. This particular activity involved the acquisition and management of 49 rental properties located in Clarksville, Tennessee. He acquired this property from an eighty-six year old customer of his member firm. The customer allegedly agreed to finance the $1 million sale of the properties and agreed to loan James Clay an additional $500,000 for Clay to pay for repairs. The findings also state that Clay misrepresented his involvement in this business venture to his member firm. He allegedly stated that he was simply helping facilitate his sister’s purchase of the properties. Due to these allegations, he was terminated from his position at CUSO Financial Services and barred by FINRA from acting as a securities broker in any fashion.

What Does This Mean?

Securities brokers are not allowed to engaged in outside business ventures without first disclosing it to their member firm. This is because it can often create significant conflicts of interest that can lead to member firm customers being financially harmed. It is the responsibility of the securities firm to prevent its customer from being harmed in this fashion. This is why they require brokers to disclose any involvement they may have in any business ventures outside their scope. This disclosure gives securities firms the opportunity to decide if any member firm customers will be harmed by what the broker is engaging in. However, securities firms are not absolved from liability simply because the broker forgoes this disclosure. Securities firms need to have the necessary procedures in place designed to adequately supervise their registered brokers and catch any unauthorized activity. More often than not, if the broker is not involving any member firm customers in their business venture, then there is no issue. However, James Clay allegedly directly purchased this property from an elderly member firm customer and solicited a half a million dollar loan from him. He allegedly misrepresented this fact to his member firm because he knew some might see it as financial elder abuse.

Oakes & Fosher Can Help

Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.

Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with James Clay, please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.