State Regulators Bar Advisor James McGehee after Allegations of Risky Options Trading
According to Investment News, James W. McGehee, a financial advisor from Colorado, was reportedly barred from the securities industry in Colorado after his high-risk options trading strategy caused severe losses for his clients. One notable case involved a 76-year-old retiree whose account allegedly plummeted from $205,000 to $18,000 in just 18 months, primarily due to the options trades McGehee allegedly recommended. McGehee’s firm reportedly managed $3 million for 20 clients and engaged in over 11,000 trades, with about 90% being in options.
The Colorado Division of Securities reportedly found McGehee guilty of violating the Colorado Securities Act by failing to disclose the risks and suitability of the options strategy to his clients, amounting to investment advisor fraud.
Options trading is inherently risky and often unsuitable for most clients. This trading strategy can lead to significant losses and is sometimes aggressively recommended by brokers due to the high commissions they generate, ranging from 5% to 50% of the option’s value.
Options provide the right to buy or sell underlying stock at a premium but can result in complete loss, making them a contentious issue within the financial advisory industry.
FINRA BrokerCheck – James McGehee
The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.
Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.
James McGehee was reportedly registered with the following brokerage firms and registered investment advisory firms during his career in the securities industry, among others.
MCGEHEE WEALTH MANAGEMENT INC (CRD#:283927), WHEAT RIDGE, CO,
IA, 09/04/2008 – 06/02/2016, WADDELL & REED (CRD#:866), DENVER, CO
B, 08/14/2008 – 06/02/2016, WADDELL & REED (CRD#:866), DENVER, CO
Free Consultation with a Securities Attorney
If you have suffered investment losses with James McGehee, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.
Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.
With over 30 years of securities law experience, The White Law Group has the expertise to help investors to recover their securities fraud losses.
Tags: broker investigation, James McGehee, McGehee Wealth Last modified: July 1, 2024
