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Nearly two years after being charged with the murder of a client and a million-dollar fraud scam, incarcerated former financial advisor Keith Todd Ashley has been barred from the industry.
FINRA said that
He faces up to life in federal prison on those charges alone, according to prosecutors in the Eastern District of Texas. A separate grand jury in Dallas County indicted Ashley in December 2020 on murder charges after investigators
In a display of how FINRA's BrokerCheck database can sometimes omit information that
The Financial Industry Regulatory Authority, which oversees brokers, and the government agency overseeing it, the Securities and Exchange Commission, often take a lot of time to act in the wake of prominent cases, according to fraud expert Louis Straney of Arbitration Insight. He cited the example of
"It would have to either be self-reported or reported by Parkland. In the absence of that, FINRA is not going to research it," he said. "If we get right down to the granular level, this guy should not have been in the industry."
Ashley won't be required to submit his official 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 stemmed from the regulator's requests for information failing to reach Ashley during a series of moves between jail facilities under different jurisdictions and at varying locations over the past two years, Whalen said. The defense plans to contest Ashley's Oct. 5 verdict in the federal case based on its view that the evidence "on some of the counts did not support conviction," Whalen said.
"We believe the government overreached in charging him with so many offenses, and our hope is that, once it's analyzed and looked at, the court or the Fifth Circuit of Appeals will come to the same conclusion," he said. He noted that it's not likely that the murder case will proceed until the federal case is complete.
Parkland terminated Ashley in October 2020 while citing allegations that he engaged in undisclosed outside business activities and carried out private securities transactions without prior notice to his employer. The firm filled out its required Form U5 amendment correctly, since the murder victim would be considered a partner in an outside business activity and not formally a client to Parkland, FINRA spokesman Ray Pellecchia said in an email.
"The respondent determined to litigate the charges (as opposed to settling them), a process that can take more time. The investigation that led to the charges, of course, takes time as well," Pellecchia said. "From the time that FINRA filed its complaint, the respondent has been imprisoned and out of the business."
In its disbarment of Ashley, FINRA noted that it had sent requests for information about his firing from Parkland by first class and certified mail to the Bowie County Correctional Center in Texarkana, Texas, where Ashley was jailed after his original 2020 arrest. The regulator received no response, which is a violation of its rules and the most common reason that FINRA bans brokers from the industry.
In addition to the capital murder case in Dallas County, federal investigators alleged that Ashley defrauded clients out 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 payments, according to investigators.
"Ashley went to great lengths to defraud clients that trusted him," U.S. Attorney Brit Featherston said in a statement. "By plotting and causing the death of one 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-artist who would go so far as murder to get what he wanted."
The list of 31 witnesses in the federal trial included the FBI, local police and fire officials, the murder victim's wife and employees of Parkland, Midland National Life Insurance, BB&T and Texas Capital Bank.
Investigators first cracked the case in 2020 when investigating the apparent suicide of a 62-year-old client, who they found with a gun
