A Complex Web of Financial Misdeeds
Looking into the world of investments and securities, one must navigate with utmost caution. There are many pitfalls and dangers. A recent case exemplifying this involves David Geake (CRD #: 3088891), a broker formerly registered with American Trust Investment Services. His actions are detailed in his BrokerCheck record, which are accessible here.
Official records from FINRA (Financial Industry Regulatory Authority) indicate that multiple investor disputes have been logged against Geake. These allegations range from violations of Regulation Best Interest, the Illinois Securities Act of 1953, and multiple FINRA rules, to breach of contract and failure to supervise. Over a dozen pending disputes are linked to Geake, potentially leaving plenty of investors out in the cold.
With their credibility and trust shattered, victims are seeking significant amounts in damages. The financial hit is severe: one claimant seeks $167,797, another $200,000. Less significant but still alarming are allegations that Geake recommended unsuitable investments, executed unauthorized trades, and made questionable recommendations for alternative investments. All these actions have left a trail of dismayed clients and sizable financial fallout.
As the allegations make their way through the regulatory process, David Geake faces serious consequences. The pending regulatory actions and legal disputes reveal the extent of the problem. With more than a million dollars on the line in requested damages, these disputes underscore the serious nature of the accusations levelled against David Geake.
Examining the Track Record
David Geake isn’t a new name to the industry. He passed the Uniform Investment Adviser Law Examination (Series 65) and the General Securities Representative Examination (Series 7), among others. His association with the financial sector includes work with reputable firms like Ausdal Financial Partners, American Trust Investment Services, and Madison Avenue Securities.
However, this extensive background became clouded with allegations of misconduct. David Geake eventually resigned from Ausdal Financial Partners in 2018 due to allegations about his involvement in a private security transaction not reported to his employing firm. Geake’s trajectory sets an important reminder. As Benjamin Franklin once said, “It takes many good deeds to build a good reputation, and only one bad one to lose it.”
The series of allegations facing Geake points towards a pattern of misconduct. This pattern, along with his eventual bar from FINRA, substantiates the need for investors to maintain constant vigilance in choosing reliable and trustworthy finance professionals.
Unpacking the FINRA Rules
Deciphering the legal web surrounding Geake’s case, let’s look at the FINRA rules that were broken. Understanding them is essential for investors to make informed decisions.
FINRA Rule 2111, for instance, requires brokers to tailor their investment recommendations to an investor’s profile. It includes information about their risk tolerance, financial goals, age, and other relevant factors. Not honoring these fundamental principles pushes investors into a dangerous territory.
Then there is Regulation Best Interest (Reg-BI), an SEC regulation that mandates brokerage firms to prioritize their clients’ best interests. In other words, firms are obliged to do their homework before recommending investments – something to keep in mind next time you are presented with an “opportunity of a lifetime”.
Other violated rules include FINRA Rule 3110, which requires companies to establish supervisory systems for compliance with security rules, and FINRA Rule 2020, which forbids deceptive methods to influence the purchase and sale of securities. Finally, there’s also FINRA Rule 2010, laying down a high standard of commercial honor for brokers, something every investor has a right to expect.
Consequences and Lessons Learned
The allegations led to a permanent bar for David Geake from FINRA, not to mention an irrecoverable dent in his professional reputation. Investors have suffered financial losses and trust issues, leading to a domino effect of negative outcomes.
However, these unfortunate events serve as a learning experience for us. Fred Schwed Jr. in his book ‘Where Are the Customers’ Yachts?’ pointed out that in the financial world there are two kinds of forecasters: those who don’t know about the future and those who don’t know they don’t know. Just as believed, finding trustworthy financial advisors is essential for investors.
Despite the regrettable circumstances, investors aren’t powerless. If an investor complaint gets denied, they can still seek FINRA arbitration and recover their losses. It’s crucial to understand that the end of a trial doesn’t mean the end of the road.
Final Reflections
The case of David Geake serves as a reminder of the complexities inherent in the financial and legal sectors. However, by breaking down these intricacies in a straightforward manner, investors can better arm themselves against the potential pitfalls of financial misadventure.
