National investment loss attorneys KlaymanToskes reports that the firm has filed a FINRA arbitration claim (no. 23-00934) seeking up to $500,000 in investment loss recovery against American Trust Investment Services and Chicago, Illinois-based broker/investment advisor David Richard Geake (CRD# 3088891), in connection with over concentrating his customer’s portfolio in unsuitable, speculative investments, and unauthorized purchases.
According to the claim, Geake allegedly also failed to act in the “best interest” of the customer, misrepresented and omitted material facts regarding investment recommendations, breached his fiduciary duty, and acted negligently in violation of the federal securities laws. KlaymanToskes previously reported Geake’s 22 public disclosures and customer complaints that allege a total of over $7 million in investor damages.
The customer entrusted his entire life savings to David Geake and American Trust Investment Services (“ATIS”). Following the fallout of his divorce, the customer sought to recover financially while safely planning for his retirement years. The customer opened five accounts at ATIS under the guidance of Geake, including IRA and individual accounts.
In two of the customer’s IRA accounts, Geake purchased two American Equity, Income Shield 10 investments. In an individual account, Geake purchased a target fund, closed-end fund and mCloud Technologies stock. In another IRA, Geake purchased target funds, closed-end funds, an Alternative Investment called Cottonwood Communities Class A and mCloud Technologies.
The mCloud Technologies stock purchases made by Geake were unauthorized by the customer and the client first learned of the unauthorized purchase when he noticed the significant losses on his account statements. In total, over $95,000 was invested in mCloud.
American Trust Investment Services and David Richard Geake misrepresented the risks associated with the investments recommended to the customer, made material misrepresentations and omissions, and engaged in unauthorized purchases. The customer was unaware that the investments were speculative and incorporated significant risks.
When the customer moved his account to JP Morgan, the firm would not accept and take custody of his Cottonwood Communities Alternative Investment due to its speculative risk and lack of liquidity. Additionally, the customer was not made aware by Geake that the Cottonwood Communities investment has a surrender charge of $5,000 if it is surrendered before six years.
The customer submitted documents to liquidate the Cottonwood Communities investment and transfer the funds to JP Morgan, however, he was advised that the form could not be submitted until the end of the month. The customer is hopeful he will be able to limit any additional losses in the Alternative Investment, but also incurred a $5,000 capital gain tax.
David Richard Geake (CRD# 3088891 is currently registered as a broker/investment advisor with American Trust Investment Services in Chicago, IL. Geake was permitted to resign from Ausdal Financial Partners, Inc., where he worked from 2016 to 2018 in Northbrook, IL, following allegations that he engaged in an unreported private security transaction.
The claim alleges American Trust Investment Services and its representative David Richard Geake engaged in the following acts of misconduct/securities violations:
Customers of American Trust Investment Services and/or David Richard Geake who suffered investment losses are encouraged to contact attorney Lawrence L. Klayman, Esq. at (888) 997-9956 or lklayman@klaymantoskes.com for a free and confidential consultation to discuss legal options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com