It was quite the stir in my world of finance when news broke that Austin broker Jeffrey W Davidson was fined $15,000 and suspended for a whopping 21 months by the Financial Industry Regulatory Authority (FINRA). This FINRA action comes after Davidson got involved in some shady business—raising over $10 million through an unauthorized private offering while affiliated with Equitable Advisors LLC.
Breaking Down What Went Wrong for Davidson
As a financial analyst, I see these sorts of stories too often—Davidson’s case included him pocketing a pretty penny without getting a nod from his employer. Raising a cool $10.21 million through a private offering of securities in a company that he helped start is no small feat. Normally, doing this would require a heads-up and thumbs-up in writing from his member firm. But Davidson decided to skip that step, driving his career right into a regulatory wall.
A peek at the FINRA report shows that Davidson had mentioned his company stake to Equitable Advisors, but it was the hush-hush sale of shares that his firm allegedly knew nothing about. This oversight isn’t just a small error—it’s a glaring breach of the Securities Act of 1933.
FINRA’s investigation paints a clear picture: Davidson hired help to sell the shares, drafted an investment document, talked shop with potential investors, and fleshed out the deal’s details—a laundry list of no-nos for someone in his position. To top it off, some of his own clients at Equitable Advisors ended up investing in the venture through a limited partnership.
The Fallout from Davidson’s Actions
Now, the real trouble with sneaky deals is that they’re not just against the rules—they’re dangerous for investors. Even though Davidson didn’t earn direct commissions from the deal, he and his partner did bank about $2.4 million selling part of their company. And that’s where conflicts of interest can sneak in.
Finance guru Warren Buffett once said, “Without integrity, intelligence is a waste and success is unattainable.” Davidson’s conduct reflects why such integrity is key in finance. The very regulations Davidson broke are in place to guard investors and firms alike. His shadowy methods and late confessions mean investors could’ve been gambling with their money without even knowing it.
Davidson’s Status after the Dust has Settled
Equitable Advisors let Davidson go on January 26, 2022. His defense? He claims the dealings were part of a side gig that got the firm’s okay, and that he had been transparent with management. FINRA, though, isn’t broadcasting where they got their tips from. However, Davidson and his wife co-run a fitness company, Camp Gladiator, which she started after an impressive win on “American Gladiators” in 2008.
Today, Jeffrey W Davidson is with Victory Financial Group, where he’s the top dog and founder, overseeing more than $143 million as of last May, according to ThinkAdvisor. With two decades in the game and a resume that lists two firms, Davidson’s BrokerCheck record isn’t squeaky clean anymore—it’s got a pair of blemishes: one for this FINRA fine and another for the chop from Equitable Advisors.
It’s said that a bad financial advisor can cost you more than just their fees, but potentially your entire investment. Those who’ve taken a financial hit from dealings with Davidson might want to look at FINRA arbitration—it could be a shot at getting back some of those losses.
When trusting a financial advisor with your hard-earned cash, always check their FINRA’s BrokerCheck, including their CRM number, and stay alert to any red flags. That’s an Emily Carter tip for you—a little due diligence can go a long way in keeping your investments on solid ground.
