David Richard Geake, of Northbrook, Illinois, a stockbroker registered with Ausdal Financial Partners Inc., has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Geake engaged in private securities transactions. Letter of Acceptance, Waiver, and Consent No. 2021072679901 (July 10, 2023).
In September 2018, Ausdal Financial Partners disclosed to FINRA its termination of Geake’s stockbroker registration based upon allegations that he participated in an undisclosed private securities transaction.
According to the AWC, in November of 2016, after joining Ausdal Financial Partners, Geake persuaded an older couple to use $15,000,000.00 of their stocks as security for a $2,500,000.00 million bank loan for Company A. These individuals were not customers of Ausdal Financial Partners. Geake told the couple that the chances of losing money on this investment were very low.
Geake arranged the deal and handled the documents for the couple. Using these stocks to secure the loan was viewed by the regulator as offering a financial security. The couple got 200 shares of regular stock in Company A in return for ensuring the loan. By promoting this stock pledge and facilitating the deal, Geake was involved in a private securities transaction.
The regulator stated that by April of 2018, Company A had completely failed to pay back the bank loan and shut down. In 2018, the bank demanded the full repayment of the loan. Therefore, the couple needed to pay back the bank loan with interest.
FINRA stated that Ausdal Financial Partners’ rules forbade its stockbrokers, including Geake, from participating in any private transactions without written approval. Geake failed to give a written notification to Ausdal Financial Partners before he took part in the private deal. Also, Geake falsely claimed to Ausdal Financial Partners on his yearly compliance questionnaires that he was not selling away.
Therefore, Geake violated FINRA Rules 3280 and 2010.
FINRA Public Disclosure shows that Geake was referenced in twenty-five (25) customer initiated investment related disputes concerning Geake’s conduct while associated with securities broker dealers, including American Trust Investment Services Inc. On December 28, 2022, a customer initiated investment related FINRA securities arbitration claim involving Geake’s conduct was settled for $14,000.00 in damages based upon allegations that Geake made misrepresentations of material fact and made unsuitable recommendations of GWG L Bonds when Geake was associated with American Trust Investment Services Inc. FINRA Arbitration No. 22-01893.
On January 9, 2023, a customer filed an investment related FINRA securities arbitration claim involving Geake’s conduct in which the customer requested $60,000.00 in damages based upon allegations that Geake made unsuitable recommendations of direct investments (LP interests and DPP interests) during the time that Geake was associated with Madison Avenue Securities LLC. FINRA Arbitration No. 23-00031.
Geake was also referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $15,000.00 in damages based upon allegations that Geake engaged in unsuitable trading in GWG L Bonds when Geake was associated with Ausdal Financial Partners Inc. FINRA Arbitration No. 22-00572 (April 18, 2023).
On June 1, 2023, a customer initiated investment related FINRA securities arbitration claim involving Geake’s conduct was settled for $14,999.00 in damages based upon allegations that Geake failed to perform due diligence, breached his fiduciary duties, made misrepresentations of material fact, and breached a contract in connection with the sale of GWG L Bonds during the time that Geake was associated with Ausdal Financial Partners Inc. FINRA Arbitration No. 23-00094.
Geake was also referenced in a customer initiated investment related complaint filed on June 2, 2023, in which the customer requested $42,000.00 in damages based upon allegations that Geake breached his fiduciary duties and failed to supervise certain representatives in connection with the recommendation and sale of GWG L Bonds. The customer withdrew this complaint.
Geake was associated with Ausdal Financial Partners Inc. as a stockbroker from February 29, 2016, to September 17, 2018. He was also associated with American Trust Investment Services Inc. from September 14, 2018, to May 30, 2023.
