Alabama Securties Commission

On 9/28/22 an Order to Bar (OB-2022-0023) was issued against the Respondent by Alabama Securities Commission. OB issued due to Respondent failed to make full & complete disclosure that clients' accounts were being sold, moved to Graysail & lack of respondent's involvement with their accounts. For more info contact the Alabama Securities Commission at 334-242-2984

NO RESPONSE

Bar (Permanent)

ALL CAPACITIES

UNLIMITED-FOREVER

SUSPENSION

11/17/2022

NONE

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Plaintiff, the United States Securities and Exchange Commission ("Commission" or "SEC"), alleges that between at least January 2019 and December 2019, Defendant Jared D. Eakes misappropriated over $2.6 million from clients of GraySail Advisers, LLC, an investment advisor firm that Eakes owned and controlled. Eakes did so primarily by causing these clients to purchase fake promissory notes purportedly issued by a company called Small World Capital, LLC. In truth, the notes were not issued by Small World Capital, as Eakes had no authority to act on behalf of that entity. Several of the defrauded clients had previously been advisory clients of Defendant James Blake Daughtry prior to joining GraySail. Daughtry failed to tell these clients that Eakes was paying him for selling his advisory and brokerage business and moving his clients to GraySail. For these clients, after the sale to GraySail was complete, Daughtry expected to continue his existing practice of reviewing transactions in the client's account with the client before those transactions were executed by Eakes. In fact, Daughtry did not do this, but never told these clients that he had stopped reviewing transactions with them. Daughtry also recruited new clients to GraySail following the sale of his advisory business to Eakes. He told these clients that he would monitor their accounts, and review any proposed investments with GraySail before such investments were consummated. Daughtry failed to abide by these promises, even when several clients raised questions about certain investments that had been made in their accounts with GraySail. Daughtry's failure to exercise the requisite care for his clients, once their accounts were at GraySail, enabled Eakes to defraud these clients. As a result of the conduct described herein, Daughtry violated Section 206(2) of the Advisers Act.

Plaintiff alleged losses in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.

$65,000.00

Plaintiff alleged losses in excess of $200,000 in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.

$200,000.00

$20,000.00

Plaintiff alleged losses of approximately $231,752 in connection with Daughtry allegedly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.

$231,752.00

Plaintiffs allege losses of approximately $1.5 million in connection with Daughtry alledgly soliciting clients to open account with a third party registered investment advisor who the SEC found to have been engaged in fraud.

$1,500,000.00

$2,000,000.00

Client alleges unauthorized transactions, misrepresentations, negligence and breach of fiduciary duties.

$65,000.00

$29,900.00

Kestra Investment Services, LLC

Discharged

Daughtry violated FINRA Rules 8210 and 2010 and was bar from associating with any FINRA member firm in any capacity

FINRA

Without admitting or denying the findings, Daughtry consented to the sanction and to the entry of findings that he refused to appear for on-the-record testimony requested by FINRA in connection with an investigation into potentially fraudulent and unauthorized transactions in customers' accounts.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All Capacities

Indefinite

3/18/2020