FINRA's Department of Enforcement filed a complaint against former Edward Jones adviser Kory Penland Keath of the firm's branch in Enumclaw, Washington for allegedly circumventing the firm's supervisory systems by failing to report that her family had been appointed beneficiaries of an elderly client's estate and that she had accepted a gift from this customer worth $12,000.
OHO Disciplinary Proceeding #2015044489701
The findings state that in 2009, Keath sent a fax to her 90-year-old client's attorney requesting that her own daughter and grandson be added as beneficiaries to the elderly customer's trust, with her daughter designated as durable power of attorney. In all, the report mentions that Keath's daughter and grandson were to receive 25% of the client's estate.
At the time, Edward Jones' written supervisory procedures discouraged its associates from being named directly as beneficiaries of a client's trust or estate, and required associates to notify the firm whenever a client named an associate's family member as a beneficiary, indicating in its policy that, "Edward Jones expressly reserves the right to investigate any and all bequests or beneficiary designations involving an associate...[because] the situation could be viewed as inappropriate."
Nonetheless, Keath allegedly failed to make such notification when her daughter and grandson became beneficiaries.
Keath also purportedly assisted in naming the Edward Jones Trust Company as successor co-trustee of the client's trust in 2009, which, because the Trust Company is an Edward Jones affiliate, entitled Keath to 35% of its fee: the record indicates that from 2009 through 2013, Keath received nearly $45,000 in commission payments from the trust account.
The report states that in 2010, Keath also failed to notify Edward Jones of a trip to Egypt, which was fully paid for by the elderly client using funds from his trust ($50,000 was wired out of the trust account to pay for the trip; Keath's portion was valued at $12,000), even though Edward Jones' WSPs prohibited its representatives from receiving gifts totaling over $100 from a client during a single year.
According to FINRA, Keath's family received $240,000 after her elderly client passed away, of which Keath deposited over $41,000 into an account she shared with her daughter.
Upon discovering Keath's misconduct in 2015, Edward Jones terminated her for failing to report her family's involvement as beneficiaries, as well for accepting a prohibited $12,000 gift from her client.
If you have invested with Kory Penland Keath or with any broker or financial adviser whose abuse or violation of firm policy, or whose illicit behavior has resulted in excessive fees or commission payments that have been harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.