Two investment advisor reps and their firm were charged by Massachussets authorities on Wednesday with allegedly “gambling away” $10 million of clients' money using unsuitable, high-risk energy investments.

James G. Daly of Franklin, Mass., and Michael J. O’Keeffe of Millis, Mass., who formed Oakdale Wealth Management LLP in 2006, chose to invest nearly all of their firm’s 250 clients in high-risk energy investments, such as oil and natural gas, according to a complaint filed by state Secretary of the Commonwealth William F. Galvin. The advisors were also charged with breaching their fiduciary duties to clients.

“Oakdale clients lost millions of dollars of assets as a result of substantial losses in their energy-based investments," the complaint stated. "Hard working investors, such as retired police officers, bus drivers and construction workers, lost a significant portion of their retirement savings."

From 2006 until 2018, Daly used his discretionary trading authority over Oakdale client accounts to invest 30 percent of nearly all clients in energy-related investments, the complaint said.

The state Securities Division is awaiting a final accounting from investors, but estimates of client losses run as high as $10 million, division spokeswoman Debra O’Malley told Financial Advisor Magazine.

The phone number for Oakdale Wealth Management in Medfield, Mass., was disconnected and neither advisor could be reached for comment.

Despite warnings about the potential volatility of the energy sector, Daly, who handled most of the investment advisory business, opted to over-concentrate nearly every client in energy investments, regardless of age, risk tolerance and net worth, the complaint alleged. 

O’Keeffe, who acted as the firm’s chief compliance officer, “rubber-stamped all of Daly’s investment decisions and failed to conduct even a cursory review of the suitability of high-risk investments in the energy sector,” the complaint stated.

The complaint stated that, as fiduciaries, Daly and O’Keeffe had a duty to act in the best interests of their clients.

Oakdale’s failure to tailor its approach to each individual client’s needs led to significant losses for clients, including those with low risk tolerance, such as a 74-year-old retiree whose terminally ill husband set up an account with Oakdale for her to live off of after his death, the complaint said. Oakdale also allegedly lost $354,353 of a charitable organization’s $1 million investment.

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