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

Kelly Barnett was a Florida based securities broker. He worked in the securities industry for seventeen years. During his career he was registered with five different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

  • B.B. Graham & Company (2000-2002)
  • Morgan Stanley (2002-2009)
  • Edwards Jones (2009-2012)
  • Metlife Securities (2012-2015)
  • FSC Securities (2016-2018)

The Allegations

Kelly Barnett was officially sanctioned by FINRA in May 2018. The findings in this matter state that he allegedly used discretion in the accounts of five customers without written authorization or acceptance of the accounts as discretionary.

The findings also state that one of Kelly Barnett’s customers died of a heart attack. Barnett allegedly placed three trades in the deceased customer’s account for the sale of two ETFs and for the purchase of one ETF. Two days after that, he allegedly placed two additional trades in the account. Kelly Barnett had never been given a written grant of authorization by the customer to use discretion in the account.

Kelly Barnett allegedly created two false handwritten documents that stated he had spoken to the deceased customer on the day of the trades. He was able to do this due to the fact that he allegedly kept pre-signed documents signed by his customers.

Due to the allegations against him in this matter, Kelly Barnett was suspended from acting as a securities broker in any fashion for a period of six months. He was also fined $15,000. Kelly Barnett had been terminated from his position at MetLife Securities three years prior due to these alleged actions.

Unauthorized Trading

Securities brokers, like Kelly Barnett, are not allowed to execute trades on their customers’ behalf without first obtaining authorization to do so. This is because investors are entitled to the opportunity to decide for themselves if they want to be invested in a particular investment. When securities brokers execute trades without their customer’s authorization, it is often because they do not think the investor would approve of the investment.

There is a trading practice that many securities brokers engage in known as discretion. This practice enables the securities broker to execute trades in their customer’s account without having to obtain authorization for every trade. Brokers can only engage in this practice if they receive their customer’s express written authorization and have their member firm accept the account in question as suitable for discretionary trading.

Discretionary trading can be a very slippery slope as it gives securities brokers an excess of power. Many less than scrupulous securities brokers will often abuse this power and run wild with their discretionary authority. They might place their customers in investments they are not suited for or trade their customers accounts excessively which results in unnecessary fees and trading losses.

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 Kelly Barnett, 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.