In a surprising event, retiree Robert Golden has sued his financial advisor, James McGehee, for $241,000. This lawsuit arises from claims that McGehee depleted Golden’s retirement savings through high-risk investments.
In 2019, Golden gave his $241,000 to McGehee with the expectation of a conservative strategy. However, he discovered his account subjected to the intense fluctuations of volatile securities and options trading.
At one juncture, his savings increased to $396,000 only to plummet down to a scant $18,000 after distributions.
Golden’s lawsuit levels grave accusations against McGehee including theft and elder abuse. He contends that McGehee disregarded his requests for safer investments and also neglected to respond when he requested money from the account.
The Colorado Division of Securities initiated an investigation that verified these accusations prompting McGehee and his firm to surrender their advisor licenses.
With damages claimed surpassing half a million dollars for theft, fraud, and other allegations; this case emphasizes the risks inherent in uncontrolled investment strategies and their significant effects on individuals’ financial stability.
Continue reading to learn more about this compelling legal conflict.
Key Takeaways
Table of Contents
- Robert Golden lost nearly all his $241,000 retirement savings due to risky bets made by financial advisor James McGehee. The account fell from $396,000 to just $18,000.
- James McGehee faces allegations including mismanagement of funds, criminal theft, elder abuse, and investment fraud. He did not respond to requests for safer investments or distributions.
- The lawsuit details how McGehee’s risky investment strategy involved volatile stocks and betting apps like DraftKings, significantly impacting Golden’s finances.
- Following an investigation by the Colorado Division of Securities, McGehee had to surrender his advisor licenses due to findings of non-disclosure and fraudulent activities.
- This case underscores the importance of cautious investment strategies and responsive communication between financial advisors and their clients to protect retirement savings.
Investor’s Allegations Against James McGehee
James McGehee faces serious allegations from an investor, including mismanagement of retirement savings and accusations of criminal theft and elder abuse. The investor is pursuing legal action against McGehee for the alleged financial misconduct.
Mismanagement of Retirement Savings
Robert Golden hired James McGehee in 2019 to look after his $241,000 retirement fund. McGehee’s choices led the account from a peak of $396,000 down to a mere $18,000 after all distributions were made.
Golden accuses McGehee of ignoring his pleas for safer investment options. Furthermore, he claims that requests for distributions went unanswered by McGehee, exacerbating the financial mismanagement issues and contributing significantly to the loss of almost all his retirement savings.
Allegations of Criminal Theft and Elder Abuse
James McGehee is subject to grave charges from 76-year-old Robert Golden. Golden accuses him of stealing criminally and exploiting the elderly. This disagreement arises from inappropriate handling of his retirement savings, leading to considerable economic damage and emotional turmoil for Golden.
The lawsuit indicates McGehee’s participation in illegal activities, which inevitably led to the revocation of his state license.
This case illuminates a distressing example of financial abuse of the elderly and investment fraud. The accuations imply that McGehee misappropriated funds and also took part in actions that violate the ethical norms expected from financial advisors.
These charges emphasize the lawsuit brought against him for professional misbehavior and regulatory breaches related to financial taking advantage of elders.
Details of the Lawsuit
The lawsuit delves into Golden’s financial situation and McGehee’s investment strategy. It highlights the lack of response to distribution requests and risky investment recommendations.
Golden’s Financial Situation
Robert Golden, age 76, faced financial challenges that many retirees encounter. He depended on his Social Security and retirement savings for living expenses. His situation was tight, as he also had to make mortgage payments.
In 2019, seeking a more secure future, Golden handed over his $241,000 retirement account to James McGehee. He wanted McGehee to follow a conservative investment strategy that would protect his retirement finances while covering daily and long-term expenses.
Golden’s everyday life revolved around the careful management of these funds. With no other significant sources of income, his social security benefits and the said retirement account were critical for managing both his mortgage payments and day-to-day costs effectively.
This delicate balance made it essential for any investments made with his savings to be cautious and aimed at preserving capital above all else.
McGehee’s Investment Strategy
– McGehee’s investment strategy involved highly risky and speculative investments, including volatile stocks and options. He described his approach as “ultra-aggressive,” equating it to a coin flip, displaying a lack of concern for the potential losses faced by the investor.
Despite substantial declines in May 2020, he encouraged continued faith in these ventures. By February 2021, McGehee had even suggested investing in betting apps like DraftKings, further highlighting the imprudent nature of his financial advice.
McGehee’s investment strategy encompassed high-risk securities and showcased an ultra-aggressive approach with little regard for potential losses.
Lack of Response to Distribution Requests
McGehee persistently neglected Golden’s distribution requests despite repeated attempts. Evidence shows that McGehee failed to respond to numerous emails requesting safer investments and distribution of funds.
Even as Golden’s account value dropped, McGehee did not act on multiple distribution requests, indicating a lack of responsiveness to investor concerns.
This irresponsiveness exemplifies the negligence in handling distribution requests, demonstrating a concerning disregard for Golden’s financial well-being. Such nonresponsive behavior significantly impacted the situation at hand, prompting further investigation into McGehee’s conduct and its ramifications.
Risky Investment Recommendations
Following the recommendation from James McGehee to invest in betting apps such as DraftKings prior to high-profile events like the Super Bowl, Golden’s investment strategy took a risky turn.
McGehee promoted options trading with a focus on betting apps, which is riskier compared to traditional stock trading. Moreover, it was reported that Golden did not fully comprehend the intricacies of options trading, adding further complexity to the situation.
The promotion of investing in betting apps particularly ahead of significant events introduces an element of financial risk and raises concerns about potentially unsuitable investment recommendations.
Furthermore, these actions may align with risks associated with investment fraud and could be at odds with typical financial advisor conduct.
Investigation and License Surrender
James McGehee’s investment strategy, lack of response to distribution requests, and risky investment recommendations led to the surrender of his advisor licenses following findings by the Colorado Division of Securities – learn more about this case.
Colorado Division of Securities Findings
The Colorado Division of Securities found that McGehee failed to disclose risks associated with options trading. An investigation revealed McGehee engaged in investment advisor fraud, and the settlement admitted he did not disclose the options strategy and its risks.
This led to the surrender of his advisor licenses due to disclosure violations and regulatory investigation findings concerning securities fraud, investment advisor misconduct, and investment risk disclosure.
Surrender of Advisor Licenses
McGehee and his firm surrendered their advisor licenses following the investigation. The state revoked McGehee’s license due to fraud, leading to the shutdown of McGehee Wealth Management after surrendering the licenses.
Conclusion
In conclusion, the lawsuit against financial advisor James McGehee highlights the importance of careful investment planning and adherence to investor preferences. Practical, easy-to-implement strategies are crucial in safeguarding retirement funds from risky bets.
Emphasizing the impact these approaches can have on protecting financial well-being is vital for investor protection. Seeking additional resources or guidance is beneficial for continued learning beyond this article.
Reflect deeply on your investment choices and stay informed to prevent similar situations.
