David Geake Investigation
July 2023 – Whiting, IN
According to publicly available records David Geake discloses 11 prior customer disputes settled for more than $2.2 million and pending customer disputes seeking damages of more than $1.5 million.
The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.
In 7/2023, without admitting or denying the findings, Geake consented to the sanction and to the entry of findings that he participated in a private securities transaction by soliciting elderly investors, a husband and wife, to pledge approximately $15 million of securities as collateral to guarantee a $2.5 million loan from a bank on behalf of a startup company without providing written notice to his member firm.
The findings stated that Geake personally invested $100,000 in the company and was also a member of its Board of Directors. Geake assured the couple that their risk of investment loss was minimal. Geake structured the transaction and facilitated the paperwork on behalf of the couple. The pledge of securities as collateral for the loan was an offer of a security and the couple received shares of the company’s common stock in exchange for their guarantee of the loan. By soliciting this pledge of securities and facilitating the transaction, Geake participated in a private securities transaction. Subsequently, the company fully defaulted on the bank loan and closed its business and the bank called for the loan to be paid in full. As a result, the couple were required to repay the entire $2.5 million bank loan with interest. Although neither of the investors were firm customers, the firm’s policies prohibited its registered representatives, including Geake, from engaging in any private securities transaction without prior express written permission. The findings also stated that Geake incorrectly attested to the firm on multiple annual compliance questionnaires that he had not participated in any private securities transaction. The sanctions ordered were that Geake was permanently barred from FINRA in all capacities.
From 3/2011 to 1/2023 eleven customer disputes were settled as follows:
- FINRA case #23-00094- Ausdal Financial Partners, Inc. (prior employer of Geake) customer alleged due diligence, breach of fiduciary duty, misrepresentation, breach of contract. The case settled for $14,999.
- FINRA case #22-01893 – American Trust Investment Services, Inc. customer alleged suitability and misrepresentation. The case settled for $14,000.
- FINRA case #22-00572 – Madison Ave Securities; Ausdal Financial Partners, Inc; American Trust Investment Services customer alleged unsuitable investments and settled for $15,000.
- FINRA case #21-01620 – Madison Ave Securities customer alleged unsuitable recommendations of multiple alternative investments and settled for $450,000.
- FINRA case #21-01137 – – Madison Ave Securities; Ausdal Financial Partners, Inc; American Trust Investment customer alleged unsuitable investment recommendations. The case settled for $165,000.\
- FINRA case #21-01177 – Madison Ave Securities customer alleged unsuitable investments and settled the case for $595,000.
- FIRNA case #21-00223 –Madison Ave Securities customer alleged unsuitable recommendations of alternative investments. The case settled for $210,000.
- FINRA case #20-01953 – Ausdal Financial Partners, Inc. customer alleged failure to supervise. The case settled for $560,000.
- FINRA case #20-01095 – Madison Avenue Securities customer alleged failure to conduct due diligence, unsuitable recommendation, over concentration, misrepresentations and omissions in violation of FINRA regulations in the sale of Alternative Investments. The case settled for$20,000.
- Madison Avenue Securities customer alleged suitability, misrepresentation, breach of fiduciary duty and securities fraud. This case settled for $40,000.
- FINRA case #11-01016 –Madison Avenue Securities customer alleged misrepresentation and suitability. The case settled for $140,000.
From 8/2022 to 1/2023 seven FINRA cases were filed by disgruntled customers and are still pending:
- FINRA case #23-00031- Madison Avenue Securities customer alleges unsuitability recommendations of alternative investments with alleged damages of $60,000.
- FINRA case 23-00163- Madison Avenue Securities customer alleges unsuitable recommendations of alternative investments with alleged damages of $588,000.
- FINRA case #23-00935 – Ausdal Financial Partners, Inc. customer alleges failure to supervise, breach of fiduciary duty, breach of contract, violation of securities law with alleged damages of $25,000.
- FINRA case #22-02904 – Ausdal Financial Partners, Inc. customer alleges due diligence, breach of fiduciary duty, misrepresentation and breach of contract with alleged damages of $76,000.
- FINRA case #22-01773- Ausdal Financial Partners, Inc., customer alleges suitability, due diligence, breach of contract and failure to supervise with $150,000 in damages.
- FINRA case #22-01680 – Ausdal Financial Partners, Inc. customer alleges unsuitable recommendations, failure to supervise, insufficient due diligence and breach of contract with alleged damages of $530,000.
- FINRA case #22-01706- Ausdal Financial Partners, Inc. customer alleges unsuitable recommendations, failure to supervise and breach of fiduciary duty with alleged damages of $130,000.
In 9/2018, Geake was permitted to resign from Ausdal Financial Partners, as a result of allegations that he was engaging in an unreported private security transaction.
Geake was employed with American Trust Investment Services Advisory, Inc. from 3/2012 until 5/2023. Before that time he was with Ausdal Financial Partners, Inc. from 2/2016 to 9/2018 and Madison Avenue Securities from 1/2007 to 5/2015.
If you have losses in an account that was handled by David Geake contact us for a no charge consultation to learn how you may be entitled to recover damages through FINRA arbitration.
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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