National investment loss and securities lawyers KlaymanToskes reports that former Merrill financial advisor Jared Dean Eakes (CRD# 6618313), is facing serious allegations from the Securities and Exchange Commission (“SEC”) and the Department of Justice (“DOJ”) for defrauding clients out of over $2.7 million through his advisory firm, GraySail Advisors, and allegations that he illegally obtained approximately $4.8 million from the Covid-era PPP financial relief program.
According to the SEC’s complaint, between January and December 2019, Jared Eakes misappropriated over $2.6 million from clients of his investment advisory firm, GraySail Advisors, LLC. Eakes primarily defrauded clients by selling fake promissory notes purportedly issued by Small World Capital, LLC, despite having no authority to act on behalf of that entity.
Eakes allegedly transferred retirement assets from 17 clients into accounts he controlled without the customers’ knowledge or authorization and used these fraudulent notes to siphon funds from client accounts. The funds were diverted for personal expenses, including repaying student loans and making significant payments to a Las Vegas casino.
The SEC’s complaint further disclosed that several clients who were defrauded had previously been advisory clients of James Blake Daughtry before joining GraySail. Daughtry failed to disclose to these clients that Eakes was paying him for transferring his advisory and brokerage business to GraySail, and he did not inform clients that he had ceased reviewing transactions in their accounts, enabling Eakes to defraud them.
Investors that suffered losses with broker Jared Eakes, James Daughtry, or any other financial advisor are encouraged to contact attorney Lawrence L. Klayman, Esq., at 888-997-9956 or by email at investigations@klaymantoskes.com to discuss recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
In addition to the allegations of client fraud, Eakes is facing charges for fraudulently obtaining approximately $4.8 million through the Paycheck Protection Program (PPP). The DOJ alleges that Eakes submitted four fraudulent loan applications containing false documentation about non-existent employees. Instead of using the funds to support payroll during the pandemic, Eakes allegedly engaged in options trading and made cash withdrawals.
Eakes was indicted on five counts of wire fraud and three counts of bank fraud. If convicted, he faces significant penalties, including up to 20 years in federal prison for each wire fraud count and up to 30 years for each bank fraud count.
The DOJ further alleges that Eakes falsely presented himself as managing millions of dollars in assets to acquire other advisors’ books of business. Despite failing to complete a takeover of an Alabama-based advisory business, Eakes moved client funds to accounts under his control, defrauding investors and using the money to repay previous victims.
According to FINRA and the SEC, investment firms such as GraySail Advisors and Merrill Lynch are responsible for the supervision of all of the activities of their registered brokers and investment advisors. Investors may be entitled to a financial recovery if their brokerage firm failed to supervise the representative managing their brokerage account, and/or if their broker/advisor made unsuitable investment recommendations.
KlaymanToskes has helped recover over $600 million (exclusive of attorneys fees and costs) for investors, and can help you determine if your loss is due to financial advisor misconduct, unsuitable investment advice, and/or other securities violations. Contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your recovery options.
KlaymanToskes is a leading national securities law firm specializing in securities arbitration and litigation on behalf of retail and institutional investors. The firm has recovered over $600 million for clients in FINRA arbitrations and other securities litigation matters. With offices in California, Florida, New York, and Puerto Rico, KlaymanToskes is committed to helping investors recover their losses and hold brokerage firms accountable for their actions.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
investigations@klaymantoskes.com
www.klaymantoskes.com