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Nearly two years after being charged with the murder of a client and a fraudulent million-dollar scam, incarcerated former financial adviser Keith Todd Ashley has been barred from the industry.
FINRA said that his case against Ashley, 50, took longer than usual to come to terms with the broker initially denying it had failed to respond to inquiries about her dismissal from Parkland Securities. A FINRA administrative panel has accepted Ashley’s potential request settlement with the regulator on October 21, about two weeks after a federal grand jury sentenced Ashley on 20 counts of wire fraud, mail fraud, bank fraud and possession of a firearm in connection with a violent crime.
He faces life in federal prison on those charges alone, according to prosecutors in the Eastern District of Texas. A separate Dallas County grand jury indicted Ashley in December 2020 for murder after investigators alleged that he killed one of his clients in an effort to recover the client’s $2 million life insurance policy. Months later, another grand jury charged him with capital murder by terrorism threat or other felony.
In a display of how FINRA’s BrokerCheck database can sometimes omit information that would be relevant for investorsAshley’s case contains no mention of the murder case.
The Financial Industry Regulatory Authority, which oversees brokers, and the government agency that oversees it, the Securities and Exchange Commission, are often slow to act on major cases, according to fraud expert Louis Straney of Arbitration Insight. He cited the example of Bernie Madoff, who was only officially banned from the industry by the SEC more than six months after pleading guilty to his notorious multi-billion dollar scheme. Murder charges also may not fall within BrokerCheck’s purview, because advisers there make voluntary disclosures, Straney said.
“It should either be self-reported or reported by Parkland. Absent that, FINRA will not search,” he said. “If we get down to the granular level, this guy shouldn’t have been in the industry.”
Ashley will not be required to submit his formal plea in the capital murder case until his trial in Dallas County, but he plans to plead not guilty, according to attorney James Whalen of the Whalen Law Office. Another reason for the timing of the FINRA case stems from the regulator’s requests for information not reaching Ashley during a series of moves between correctional facilities in different jurisdictions and in various locations over the past two years, Whalen said. The defense plans to challenge Ashley’s Oct. 5 verdict in the federal case based on its view that the evidence “on some of the counts did not support a conviction,” Whalen said.
“We believe the government has gone too far in charging him with so many offences, and we hope that once it has been analyzed and reviewed, the court or the Fifth Circuit of Appeals will come to the same conclusion. “, did he declare. He noted that the murder case is unlikely to proceed until the federal case is completed.
Parkland fired Ashley in October 2020 citing allegations that he engaged in undisclosed outside business activities and effected private securities transactions without notice to his employer. The company correctly completed its amendment to the required U5 form because the murder victim would be considered a partner in an outside business activity and not officially a client of Parkland, FINRA spokesman Ray Pellecchia said. in an email.
“The respondent has decided to plead the charges (instead of settle them), a process that may take longer. The investigation that led to the charges, of course, also takes time,” Pellecchia said. “From the time FINRA filed its complaint, the Respondent has been jailed and out of business.”
In its disbarment of Ashley, FINRA noted that it sent requests for information about her termination from Parkland by certified first-class mail to the Bowie County Correctional Center in Texarkana, Texas, where Ashley was served. imprisoned after his initial arrest in 2020. The regulator received no response, a violation of its rules and the most common reason FINRA bans brokers from the industry.
In addition to the Dallas County capital murder case, federal investigators have alleged that Ashley defrauded clients of more than $1.1 million between December 2013 and May 2020 through promises of guaranteed returns in a unit investment trust. Rather than investing the money, Ashley spent it on personal expenses such as a microbrewery, casinos, credit card payments, legal fees, mortgages and college tuition, investigators say.
“Ashley went to great lengths to defraud clients who trusted her,” U.S. Attorney Brit Featherston said in a statement. “By plotting and causing the death of a client to steal his money, Ashley committed the ultimate betrayal of trust and decency and the jury saw Ashley for who he is, a con man who would go as far as murder to get what he wanted.”
The list of 31 witnesses in the federal trial included the FBI, local police and fire departments, the murder victim’s wife, and employees of Parkland, Midland National Life Insurance, BB&T and Texas Capital Bank.
Investigators first learned of the case in 2020 when investigating the apparent suicide of a 62-year-old client, whom they found with a gun in his non-dominant hand and a typed note asking them to contact “my last friend Keith Ashley”. Carrollton police arrested Ashley after analyzing doorbell camera footage and what they described as a ‘ruse’ involving Ashley telling the client he needed a blood sample for police to insurance, the money order showed.