James Clay: FINRA Bars Former CUSO, US Bancorp Advisor

A disciplinary action taken by the Financial Industry Regulatory Authority against former Clarksville, Tennessee broker and investment advisor James Clay (CRD# 5748560) barred him over allegations he engaged in outside business activities. A former representative of CUSO Financial Services and US Bancorp Investments, Clay was barred from acting as a broker or otherwise associating with a broker-dealer firm.

According to a FINRA decision (No. 2014039775501) that became final in November 2018, James Clay was named in a FINRA complaint alleging participated in an unapproved, undisclosed outside business activity comprising “the acquisition and management of 49 rental properties located in Clarksville, Tennessee.” According to the complaint, this venture grew out of his relationship with an 86-year-old man (at the time) who was a customer of his member firm, US Bancorp Investments. FINRA states that Clay and the customer made an agreement in which the customer “would sell Clay the rental properties for $1 million, finance Clay’s purchase, and make an additional $500,000 loan to Clay for repairs and upgrades.”

FINRA’s complaint goes on to state that Clay created a company, Clay Enterprises, in connection with this outside business, and “collected and deposited” almost $6,000 in rent from the properties’ tenants into his personal bank account. He also allegedly liquidated almost $500,000 in securities in the customer’s investment advisory account to finance the $500,000 loan for repairs and upgrades. FINRA states that Clay’s receipt of this loan was eventually prevented by the customer’s son, who also complained to US Bancorp about Clay’s rental property acquisition. According to FINRA, “Clay repeatedly lied to a firm supervisor” during an internal investigation of the customer’s son’s complaint, asserting in part that he had no involvement in an outside business activity, and instead was “merely facilitating his sister’s purchase of the rental properties.” He also allegedly made these same statements again in on-the-record interviews with FINRA and in written responses to the regulator. As a result of the alleged foregoing conduct, Clay was indefinitely barred from acting as a broker or otherwise associating with a broker-dealer firm. The bar started on November 1, 2018.

James Clay is not currently registered as a broker or investment advisor. His employment history includes CUSO Financial Services, US Bancorp Investments, and Edward Jones, all in Clarksville, Tennessee. He currently holds no state licenses and has passed three securities industry qualification examinations.