Investors Seek to Recover Millions in Disputes with David Geake

David Geake (CRD #: 3088891), a broker formerly registered with American Trust Investment Services, has been barred by FINRA and is the subject of multiple pending investor disputes, according to his BrokerCheck record, accessed on February 28, 2025. Keep reading for details about his alleged conduct.

Pending Investor Disputes

On January 21, 2025, an investor named David Geake in allegations of violation of Regulation Best Interest, the Illinois Securities Act of 1953, and FINRA Rules 2010, 2120, and 3110. The dispute further alleges breach of contract and failure to supervise. The client seeks $167,797 in damages.

Another dispute filed on January 21, 2025, names David Geake in allegations of misrepresentation, failure to supervise, breach of contract, and violation of FINRA Rules 2010, 2020, 2111, and IM-2310-2. The investor seeks $200,000.

Other pending disputes involving the suitability of investments:

• January 21, 2025: The client alleges that David Geake recommended inappropriate investments and engaged in negligence. They seek $75,000.
• September 15, 2023: An investor alleges that David Geake executed unauthorized trades and made unsuitable investments. The client seeks $50,001 in damages.
• January 9, 2023: This dispute alleges David Geake made unsuitable recommendations of alternative investments. The investor seeks $60,000.

Disputes filed on January 29 and July 8, 2024, name David Geake in allegations of failure to supervise. They seek a total of $735,000 in damages.

On April 15, 2024, David Geake was named in allegations of consumer fraud, unjust enrichment, breach of contract, negligence, and violation of Illinois securities law with regard to purchases of GWG Holdings’ L Bonds in 2017 and 2018. This dispute seeks $111,000.

On July 1, 2024, David Geake was named in a dispute alleging negligence, breach of contract, and violation of Illinois securities law, the Illinois Consumer Fraud and Deceptive Business Practices Act, and federal securities laws. The client seeks $100,000 in this pending dispute.

Disputes filed on August 9 and August 28, 2023, named David Geake in allegations of unsuitable investment recommendations, misrepresentations, failure to supervise, and violation of Regulation Best Interest. These disputes seek $265,000 in damages.

A dispute filed on September 25, 2023, alleged that David Geake engaged in selling away, negligence, breach of contract, and overconcentrated the client in alternative investments. They further alleged failure to supervise and violation of Regulation Best Interest and federal securities laws. The investor seeks $500,000.

FINRA Rule 2111 and Regulation Best Interest

FINRA Rule 2111 requires that brokers tailor their investment recommendations to an investor’s profile, which includes information about their risk tolerance, financial goals, and age.

Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.

FINRA Rule 3110

FINRA Rule 3110 requires that firms establish supervisory systems to ensure their compliance with securities regulations. Firms must appoint supervisors and provide them with Written Supervisory Procedures (WSPs) to follow.

FINRA Rule 2020

FINRA Rule 2020 forbids the use of deceptive, manipulative, and otherwise fraudulent methods to influence the purchase and sale of securities. The misrepresentation or omission of material facts violates this rule.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

FINRA Rule 3260

FINRA Rule 3260 forbids brokers from conducting discretionary trading outside of accounts approved in advance by their client and firm.

FINRA Rule 3280

FINRA Rule 3280 requires brokers to provide written notice to their firm before engaging in private securities transactions.

Illinois Regulatory Action

On March 19, 2024, the State of Illinois initiated a regulatory action against David Geake, citing the Letter of Acceptance, Waiver & Consent (AWC) he entered into with FINRA on July 23, 2023. This AWC alleged that David Geake violated FINRA Rules 3280 and 2010.

This regulatory action is currently pending.

Bar by FINRA

On July 10, 2023, David Geake consented to the entry of findings that he allegedly engaged in a private securities transaction in November 2016.

A Letter of Acceptance, Waiver & Consent (AWC) alleged that David Geake was a member of the Board of Directors for Company A, a startup whose business involved developing tools for selling automotive parts online.

David Geake had allegedly invested $100,000 into the company and had previously raised funds by selling his common stock in the company prior to his employment by Ausdal Financial Partners.

In November 2016, while a representative with Ausdal Financial Partners, David Geake allegedly solicited two investors to pledge approximately $15 million of securities as collateral to guarantee a $2.5 million bank loan on Company A’s behalf. In exchange, the couple allegedly received 200 shares of the company’s common stock.

These investors were allegedly an elderly couple who were not clients of Ausdal Financial Partners. David Geake allegedly facilitated the transaction on their behalf and assured them that the risk of investment loss was low.

However, by April 2018, Company A had allegedly fully defaulted on its loan, which the bank called to be paid in full. This allegedly required the couple to repay the full $2.5 million loan with interest.

The AWC further alleged that David Geake twice claimed on annual firm compliance questionnaires that he had not participated in any private securities transactions during the relevant period. He allegedly failed to provide notice or receive approval from Ausdal Financial Partners for this transaction.

The AWC concluded that these allegations constitute violations of FINRA Rules 3280 and 2010.

Sanctions

David Geake was permanently barred by FINRA on July 10, 2023. You can read the full AWC here.

Settled and Denied Disputes

Two disputes, filed on May 13 and March 24, 2021, allege that David Geake made unsuitable investment recommendations. These disputes were settled for $210,000.

Four disputes, filed from March 2022 through November 2023, alleged that David Geake made unsuitable recommendations of alternative investments, including NorthStar Healthcare REIT and MarketServ. These disputes were settled for a total of $837,500.

On August 4, 2022, an investor alleged that David Geake breached his contract and made unsuitable investments, and further alleged failure to supervise. This was settled for $65,000.

On September 20, 2021, multiple investors filed a dispute alleging that David Geake made unsuitable recommendations of alternative investments, including Hospitality Investors Trust. This dispute was settled for $450,000.

A dispute filed on August 26, 2020, named David Geake in allegations of failure to supervise with regard to an investment in MarketServ. This dispute was settled for $560,000.

On October 30, 2019, an investor filed a dispute against David Geake alleging unsuitable recommendations of illiquid investments. The client sought $70,000 in damages.

Investors should know that the denial of their complaint doesn’t mean the end of the case. You can still seek FINRA arbitration and recover your losses following a denial.  

Resignation from Ausdal Financial Partners

On September 14, 2018, David Geake resigned from his position at Ausdal Financial Partners following allegations that he participated in a private security transaction without reporting it to the firm.

Background Information

David Geake has passed the following exams:

• Series 65 – Uniform Investment Adviser Law Examination 
• Series 63 – Uniform Securities Agent State Law Examination 
• SIE – Securities Industry Essentials Examination 
• Series 7 – General Securities Representative Examination 
• Series 6 – Investment Company Products/Variable Contracts Representative Examination 
• Series 24 – General Securities Principal Examination 

In the past, he worked with the following firms:  

• American Trust Investment Services (CRD#:3001)
• Ausdal Financial Partners (CRD#: 7995) 
• Madison Avenue Securities (CRD#:23224) 
• American General Securities Incorporated (CRD#:13626) 
• Franklin Financial Services Corporation (CRD#:5435) 

Kurta Law Can Help 

If you have suffered losses after working with David Geake, don’t hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation. 

For nearly 20 years, Kurta Law has advocated for investors. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf. Reach out today to start the process to recover your investment losses.