A local retiree claims that his quarter-million-dollar retirement account was wiped out by a Wheat Ridge investment advisor whose state license was revoked recently due to fraud.
Robert Golden, 76, believes the actions of James McGehee and McGehee Wealth Management rise to the level of criminal theft and elder abuse, according to a lawsuit he has filed.
McGehee admits only that his hazardous stock market strategy ultimately failed.
James McGehee, formerly of McGehee Wealth Management, is an accountant. (LinkedIn)
“He told me that he wanted to be aggressive and I probably was a little more than aggressive,” McGehee said by phone Friday. “I have apologized to him 100,000 times over but he felt the need to sue me over it. I guess if I was in his shoes, I probably wouldn’t blame him.”
Golden was living on Social Security, paying a mortgage on his home and using his retirement savings to cover living expenses when, in 2019, he hired McGehee to manage his $241,000 account, according to Golden and state regulators who later investigated McGehee.
Golden claims that he sought a conservative investment approach — McGehee denies this — yet his money was invested in “highly volatile securities, including options.” Options trading, in which investors pay for the right to buy or sell stocks at a set price, carries greater risk than traditional stock trading.
Golden “did not, and still does not, understand how options work,” according to his lawsuit.
The Castle Rock man said that he could only watch online as his account took a roller coaster ride. He said McGehee ignored his requests for a safer investment strategy, and also ignored some of his demands for distributions. He cites several emails from McGehee.
“The last six trades have gone against me, the next several should be spot on,” the advisor allegedly wrote to Golden in May 2020. “I know you’re nervous, try to have faith.
“It will recover, it’s at the bottom, it will go back up, trust me on this one,” he is said to have emailed two days later, noting past wins. “It was once at $203K and went to $316K.”
In February 2021, McGehee touted his decision to invest Golden’s money in betting apps.
“I just got into DraftKings because of the Super Bowl betting and then March Madness in college basketball,” he wrote, “so they will make a ton of money over the next two months.”
While Golden’s account did rise at times — it peaked at $396,000, he recalled — his entire savings ultimately was lost, except for $18,000 in distributions, Golden said.
“In the beginning, I made him a lot of money but then the market kind of turned on me,” McGehee explained his admittedly “ultra-aggressive” approach to investing. “It’s one of those situations where you flip a quarter, you call heads and it turns out tails.”
The Colorado Division of Securities investigated McGehee and found he was investing clients’ money in call options without disclosing their risk. In a June settlement, he and his firm admitted “that by failing to disclose the options strategy and its associated risk” they “engaged in investment advisor fraud.” He and the firm agreed to surrender their advisor licenses.
Before he founded McGehee Wealth Management in 2016, McGehee owned McGehee Davis & Associates, an accounting firm in Arvada. He has since returned to that firm.
In his lawsuit, Golden is seeking at least $500,000 for what he considers to be theft, fraud, breach of contract, unjust enrichment and excessive trading designed to generate fees. He is represented by the lawyer Otto Hilbert II with Otto Law in Denver, who did not answer several requests for an interview with Golden to discuss the McGehee case.
“If I had it to do over again, I’d do something different,” McGehee said Friday. When asked if that meant a more conservative strategy, he said, “Definitely something more conservative.”
“I was trying to hit him a home run,” he said, “and instead there were some strikeouts.”
A local retiree claims that his quarter-million-dollar retirement account was wiped out by a Wheat Ridge investment advisor whose state license was revoked recently due to fraud.
Robert Golden, 76, believes the actions of James McGehee and McGehee Wealth Management rise to the level of criminal theft and elder abuse, according to a lawsuit he has filed.
McGehee admits only that his hazardous stock market strategy ultimately failed.
James McGehee, formerly of McGehee Wealth Management, is an accountant. (LinkedIn)
“He told me that he wanted to be aggressive and I probably was a little more than aggressive,” McGehee said by phone Friday. “I have apologized to him 100,000 times over but he felt the need to sue me over it. I guess if I was in his shoes, I probably wouldn’t blame him.”
Golden was living on Social Security, paying a mortgage on his home and using his retirement savings to cover living expenses when, in 2019, he hired McGehee to manage his $241,000 account, according to Golden and state regulators who later investigated McGehee.
Golden claims that he sought a conservative investment approach — McGehee denies this — yet his money was invested in “highly volatile securities, including options.” Options trading, in which investors pay for the right to buy or sell stocks at a set price, carries greater risk than traditional stock trading.
Golden “did not, and still does not, understand how options work,” according to his lawsuit.
The Castle Rock man said that he could only watch online as his account took a roller coaster ride. He said McGehee ignored his requests for a safer investment strategy, and also ignored some of his demands for distributions. He cites several emails from McGehee.
“The last six trades have gone against me, the next several should be spot on,” the advisor allegedly wrote to Golden in May 2020. “I know you’re nervous, try to have faith.
“It will recover, it’s at the bottom, it will go back up, trust me on this one,” he is said to have emailed two days later, noting past wins. “It was once at $203K and went to $316K.”
In February 2021, McGehee touted his decision to invest Golden’s money in betting apps.
“I just got into DraftKings because of the Super Bowl betting and then March Madness in college basketball,” he wrote, “so they will make a ton of money over the next two months.”
While Golden’s account did rise at times — it peaked at $396,000, he recalled — his entire savings ultimately was lost, except for $18,000 in distributions, Golden said.
“In the beginning, I made him a lot of money but then the market kind of turned on me,” McGehee explained his admittedly “ultra-aggressive” approach to investing. “It’s one of those situations where you flip a quarter, you call heads and it turns out tails.”
The Colorado Division of Securities investigated McGehee and found he was investing clients’ money in call options without disclosing their risk. In a June settlement, he and his firm admitted “that by failing to disclose the options strategy and its associated risk” they “engaged in investment advisor fraud.” He and the firm agreed to surrender their advisor licenses.
Before he founded McGehee Wealth Management in 2016, McGehee owned McGehee Davis & Associates, an accounting firm in Arvada. He has since returned to that firm.
In his lawsuit, Golden is seeking at least $500,000 for what he considers to be theft, fraud, breach of contract, unjust enrichment and excessive trading designed to generate fees. He is represented by the lawyer Otto Hilbert II with Otto Law in Denver, who did not answer several requests for an interview with Golden to discuss the McGehee case.
“If I had it to do over again, I’d do something different,” McGehee said Friday. When asked if that meant a more conservative strategy, he said, “Definitely something more conservative.”
“I was trying to hit him a home run,” he said, “and instead there were some strikeouts.”
