ADVISER BETRAYED CLIENTS! $2.6 MILLION VANISHES!

SEC v. James Blake Daughtry, Jared D. Eakes — U.S. Securities and Exchange Commission Litigation Release No. 26557, dated May 21, 2026.

The SEC charged James Blake Daughtry, an Alabama investment adviser, for breaching his fiduciary duties to clients. Daughtry allegedly moved clients to Jared D. Eakes' firm, GraySail Advisors, and promised to monitor their accounts. However, Eakes misappropriated approximately $2.6 million from these clients, and Daughtry failed to uphold his promises, enabling the fraud. Daughtry consented to a final judgment permanently enjoining him from violating securities laws, barring him from the industry, and imposing a $50,000 civil penalty.

In Plain English

Imagine you hired a financial helper to watch over your savings. This helper promised to keep an eye on your money, especially if you moved it to a new place. But when your money went to the new place, the helper didn't really watch it. Meanwhile, the new place took a lot of your money, and the helper's failure to check allowed it to happen. Now, the helper has to pay a fine and can't do that job anymore.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Client Promises James Blake Daughtry, an investment adviser, promised his clients that he would monitor their accounts and review any proposed investments before they were made, especially when moving them to a new firm.
2. Client Transition Daughtry moved and/or recruited clients to Jared D. Eakes' investment advisory firm, GraySail Advisors, LLC.
3. Eakes' Misappropriation Jared D. Eakes allegedly misappropriated approximately $2.6 million from GraySail's clients, several of whom were former clients of Daughtry.
4. Failure to Monitor Despite his promises, Daughtry failed to exercise the requisite care and monitor the clients' accounts at GraySail.
5. Client Questions Ignored Daughtry did not uphold his promises, even when several clients questioned certain investments that had been made in their accounts with GraySail.
6. Enabling Fraud Daughtry's failure to exercise due care for his clients enabled Eakes to defraud these clients.

The Enforcement Action

On May 20, 2026, the United States District Court for the Middle District of Alabama entered a final consent judgment against James Blake Daughtry. The judgment permanently enjoins Daughtry from violating Section 206(2) of the Investment Advisers Act of 1940, permanently bars him from associating with a broker, dealer, or investment adviser, and orders him to pay a $50,000 civil penalty. The SEC filed its complaint against Eakes and Daughtry on September 28, 2022. The SEC’s litigation against Eakes remains pending.

Named in this action: James Blake Daughtry, Jared D. Eakes.

Original SEC litigation release ↗ · Browse all cases