Investors Seek Nearly $5 Million in Disputes with David Smith
David Smith (CRD #: 850797), a broker registered with Ausdal Financial Partners, is involved in two pending disputes, according to his BrokerCheck record, accessed on May 21, 2025. Read on to learn more about his alleged conduct as a broker.
Investor Disputes
On February 13, 2025, an investor filed a dispute naming David Smith in allegations of negligence, failure to supervise, and violation of Regulation Best Interest. The client seeks $3.87 million in this pending dispute.
Another pending dispute, filed on October 5, 2024, named David Smith in allegations of breach of contract, negligence and negligent supervision, and violation of laws and industry rules. The client seeks $1,107,868 in damages.
On March 1, 2023, David Smith and several other brokers were named in a dispute alleging breach of contract, negligence, common law fraud, and violations of federal securities laws.
They further alleged violations of the following laws:
- Colorado Uniform Securities Act
- Colorado Consumer Protection Act
- New York Consumer Protection Act
- Washington Securities Act
- Washington Consumer Protection Act
- Texas Securities Act
- Texas Deceptive Trade Practices and Consumer Protection Act
- Michigan Uniform Securities Act
- Michigan Consumer Protection Act
Investors made these allegations in relation to investments in GWG Holdings L Bonds, Redeemable Preferred Stock, and GK Investments Holdings II, LLC.
According to David Smith’s detailed BrokerCheck report, the client who named him in these allegations received a settlement of $102,500 outside of arbitration. You can read the arbitration award for the dispute here.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
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 2111 and Regulation Best Interest
FINRA Rule 2111 requires brokers to tailor their investment recommendations to suit investors’ profiles, which describe characteristics such as their age, risk tolerance, and tax status.
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 systems of supervision to maintain their compliance with securities regulations. Among other things, firms must appoint supervisors and ensure that they have adequate training or experience.
What qualifies as broker negligence?
Many types of broker misconduct may qualify as negligence, from omitting material facts to executing unauthorized trades. Investors who have lost money through broker negligence may be able to recover their funds by seeking out FINRA arbitration.
Background Information
David Smith has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- Series 99TO – Operations Professional Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 1 – Registered Representative Examination
- Series 24 – General Securities Principal Examination
David Smith is a registered broker in 25 states and a registered investment adviser in Arizona and Florida.
He has also worked for the following firms:
- Intervest International (CRD#:111516)
- Intervest International Equities Corporation (CRD#:20289)
- Security Distributors (CRD#:3336)
- Integrated Resources Equity Corporation (CRD#:6403)
- Financial Planners Equity Corporation (CRD#:7420)
- Cornerstone Financial Services (CRD#:953)
Kurta Law Can Help
If you worked with David Smith and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. 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.