Geneos Wealth Management, Inc. (“Geneos Wealth Management”) (CRD# 120894) has many different complaints filed by FINRA (Financial Industry Regulatory Authority), state regulatory organizations, and investors such as yourself. At the Law Offices of Robert Wayne Pearce, we have investigated Geneos Wealth Management, its regulatory and customer complaints, and have also represented investors with claims of fraud, negligence, and breach of fiduciary duty against this organization and its financial advisors.
If you believe you have a claim against Geneos Wealth Management , you should strongly consider hiring an investment loss lawyer. You should not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.
Can I Sue Geneos Wealth Management, Inc.?
If you’ve lost money caused by Geneos Wealth Management and/or its employees’ misconduct then the answer is, YES, you can sue Geneos Wealth Management but the odds are you signed away your right to sue in court and agreed to resolve your dispute in a FINRA arbitration proceeding. Attorney Robert Wayne Pearce has over 40 years of personal experience in FINRA arbitration proceedings and knows very well how you can not only sue Geneos Wealth Management in FINRA arbitration proceedings, but WIN that arbitration. The easiest way to know if you have a viable case against Geneos Wealth Management is to call Attorney Pearce at our office at 800-732-2889.
What is Geneos Wealth Management, Inc.?
Geneos Wealth Management (CRD# 120894) has been registered with the SEC and FINRA as a broker-dealer since 2002. The company is controlled by GWM Holdings, Inc. and headquartered in Centennial, Colorado with small branch offices located throughout the United States. Its independent broker-dealer Business Model has grown through acquisition and organic development of primarily one and two person registered representative offices supervised remotely. Today there are over 100 Geneos Wealth Management branch offices with over 200 registered representatives in every state. It is now one of the 50 largest independent broker-dealer and investment advisory firms in the United States.
Geneos Wealth Management, Inc. Has Many Different Regulatory Problems
Geneos Wealth Management’s rapid growth has not been without consequences. There have been approximately 5 Federal, state and/or self-regulatory body disclosure events; that is, final and formal proceedings initiated by a regulatory authority (e.g., a state or federal securities agency like the U.S. Securities and Exchange Commission (SEC) or self-regulatory body like the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) ) for a violation(s) of investment-related rules or regulations. In addition, there have been scores of customer complaints filed against Geneos Wealth Management for misconduct by its securities sales and investment advisory representatives that are not reported by the firm on its Central Depository Record.
We have reported and written about these regulatory problems and customer complaints over many years. Geneos Wealth Management is a repeat offender: there are 4 SEC and FINRA reported disciplinary proceedings citing the firm with one form of supervisory lapses or another in the last decade.
A BRIEF OVERVIEW OF SOME OF THE REGULATORY PROBLEMS GENEOS WEALTH MANAGEMENT HAS FACED OVER THE YEARS*
Geneos Wealth Management has been repeatedly censured, warned, and fined for its own misconduct and failure to supervise its army of financial advisors.* A few of the notable FINRA sanctions for its supervisory failures are below:
SEC Orders Geneos Wealth Management To Pay Over $1 million To Investors
The SEC conducted an investigation and discovered a series of failures by Geneos Wealth Management, a registered investment adviser and broker-dealer, in connection with its mutual fund share class selection practices and its receipt of revenue sharing payments. First, it found Geneos Wealth Management invested certain advisory clients in mutual fund share classes that charged 12b-1 fees when these clients were eligible to invest in cheaper share classes of the same funds that did not charge such fees. Geneos Wealth Management financially benefitted from investing advisory clients in mutual fund share classes with higher fees, which created a conflict of interest that Geneos Wealth Management failed to adequately disclose in its Forms ADV, Part 2A (“firm brochures”) or otherwise. In its capacity as a broker-dealer, Geneos Wealth Management received at least $1,047,617.50 in 12b-1 fees based on its advisory clients’ investments in the higher-fee share classes. Geneos Wealth Management’s practice of investing advisory clients in mutual fund share classes that charged 12b-1 fees rather than cheaper share classes of the same funds was also inconsistent with its duty to seek best execution.
Second, the SEC found that Geneos Wealth Management failed to disclose to its clients compensation that it received through agreements with two third-party broker-dealers (“Clearing Brokers”) and conflicts arising from that compensation. Pursuant to the agreements, the Clearing Brokers agreed to share with Geneos Wealth Management certain revenues that the Clearing Brokers received from the mutual funds in the Clearing Brokers’ no-transaction-fee mutual fund programs (“NTF Programs”). These payments, totaling $386,185.77, created a conflict of interest in that they provided a financial incentive for Geneos Wealth Management to favor the mutual funds in the NTF Programs over other investments when giving investment advice to its advisory clients.
Finally, the SEC found that Geneos Wealth Management failed to adopt written policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder in connection with its mutual fund share class selection practices and its revenue sharing arrangements with the Clearing Brokers.
As a result of the conduct described above, the SEC concluded Geneos Wealth Management willfully violated Sections 206(2), 206(4), and 207 of the Advisers Act and Rule 206(4)-7 thereunder and ordered it to cease-and-desist from any further violations, censured the broker-dealer and investment advisory firm, and ordered it to pay disgorgement and prejudgment interest, totaling $1,135,129.07 to compensate investors that were affected by the conduct detailed above.
FINRA Sanctions Geneos Wealth Management For Not Supervising Private Securities Transactions
FINRA investigated Geneos Wealth Management and found its representatives located at the Draper, Utah branch office participated in the execution of securities transactions, namely investments in the form of limited partnership interests, as part of their disclosed outside advisory activities. The representatives’ participation included, but was not limited to, meeting with and recommending the underlying securities to customers, providing customers with copies of the private placement memorandum and related paperwork, assisting customers with completing the investment paperwork, accepting the completed paperwork and investment funds, and receiving compensation. FINRA found that Geneos Wealth Management failed to supervise these transactions and record them on the firm’s books and records. As a result of the foregoing conduct, FINRA concluded that Geneos Wealth Management violated NASD Conduct Rule 3040, NASD Conduct Rule 2110, and FINRA Rule 2010 for which it was censured and only fined $12,500.
*Above are only two of the regulatory disciplinary actions filed against Geneos Wealth Management by FINRA. There are at least 3 other SEC, FINRA, NASSA and/or state securities regulator investigations and enforcement actions disclosures reported on BrokerCheck as regulatory disciplinary proceeding disclosures.
Geneos Wealth Management Customer Complaints
There have been hundreds, if not thousands of customer complaints filed against Geneos Wealth Management stockbrokers over the years. We have launched several investigations of current and former Geneos Wealth Management advisors:
If you have lost money investing with any of these Geneos Wealth Management advisors or others within this brokerage firm, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889.
Why Does Geneos Wealth Management, Inc. Have So Many Regulatory Problems And Customer Complaints?
Independent broker-dealers are notorious for their lax supervisory practices and procedures. The business model of these franchise type operations is to open many offices nationwide for steady growth of fixed monthly revenues without the costs attendant to a full-service branch office with on-site manager, compliance officer and operation personnel. The registered representatives of these independent broker-dealers generally operate as separately incorporated businesses. They are not employees of the broker-dealer and therefore not controlled in the same manner as full-service brokerage firm representatives. The registered representatives control their structure and costs to maximize profits and often leave the protection of investors’ rights and interests as their lowest priority.
The typical supervisory organization of independent broker-dealer operations is to have other independent contractors operate Offices of Supervisory Jurisdiction (OSJs) to monitor the registered representatives from geographically remote offices and then report to the main franchisor’s compliance office at national headquarters. The supervisors at the OSJs are not employees of the franchisor and often run their own brokerage, insurance and other businesses. They are not devoted full-time supervisors of the smaller branch offices. Consequently, OSJ managers cannot and do not supervise the day-to-day operations of the registered representatives of these Independent broker-dealers.
Generally, there is no immediate review of new accounts opened, securities transactions, business records, cash or securities receipts and deliveries, correspondence and business activities unrelated to the securities brokerage operation at these independent brokerage firms. The lax supervision leaves investors who have transferred their accounts to the smaller independent broker-dealer vulnerable to sales of securities that have not been reviewed or authorized by anyone other than the sales representative earning a commission. There may be no one onsite to detect forgeries of clients’ signatures on documents, the placement of inaccurate information about a client’s investment objectives and financial condition to document the suitability of a particular investment recommendation. Oftentimes there is no daily review of sales literature and client correspondence to protect against misrepresentations and misleading statements being made to investors. In fact, it is not unusual for there to be only one compliance audit visit per year at many of these offices.
These Independent brokerage business operations are worrisome to the North American Securities Administrators Association (NASAA), which has documented more instances of sales abuse and consequently investor losses at these firms than the traditional brokerage firms with branch offices with on-site managers and compliance personnel.
Did Geneos Wealth Management, Inc. Advisor Misconduct Cause You Investment Losses?
When financial advisor misconduct has caused you to lose substantial value to your investment accounts, you have the right to seek reimbursement from the responsible parties. Geneos Wealth Management is responsible like any employer for its financial advisors acts and omissions. In addition, it has an independent duty to supervise its stockbrokers and investment advisors. These cases can be extremely complex, and so having the support of a reputable attorney who is experienced in recovering investment losses for investors is key to your success. Many customers make the mistake of contacting Geneos Wealth Management without representation with an attorney about their complaints and have their complaints denied.
Consult With An Attorney Who Recovers Investment Losses Caused By Geneos Wealth Management, Inc. Today!
The attorneys at The Law Offices of Robert Wayne Pearce, P.A., have helped countless investors over the last 40 years recover the losses from their investment accounts that were caused by broker negligence or misconduct. The firm has extensive experience with Geneos Wealth Management cases, and Attorney Pearce is committed to seeing that those responsible for the losses you have suffered are held fully accountable.
Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve.