Geneos Wealth Management: CRD#: 120894/SEC#: 801-62331,8-65357
The firm is headquartered in Centennial, Colorado.
It was founded by Russell Diachok in 2002 and currently has nearly $3.3 billion in assets.
Geneos Wealth Management holds 52 licenses for U.S. States and Territories. There have been five disclosures made since 2020.
Geneos Wealth Management Sanctioned by FINRA Regarding LJM and GPB Sales
Geneos Wealth Management has been a member firm of FINRA’s for 20 years. As a full-service broker-dealer, it functions on an independent contractor model with roughly 350 registered financial advisors at 180 branch offices. The company’s headquarters are located in Centennial, CO.
The Nature of the FINRA Sanction
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), in March 2022, FINRA sanctioned Geneos with a censure and $150,000 fine. The company was also ordered to pay restitution of $250,710.41 plus interest to identified customers who purchased LJM, and provide certification regarding the establishment and implementation of appropriate policies, procedures and internal controls to address concerns related to alternative mutual funds as identified in the sanction. The FINRA sanction states, “Between November 9, 2016, and February 6, 2018, Geneos failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM).2 Geneos permitted the sale of LJM on its platform without having procedures reasonably designed to ensure that the firm and its representatives had a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options. Geneos also lacked a reasonable supervisory system to review representatives’ LJM recommendations. Geneos representatives sold more than $2.5 million in LJM to customers. LJM’s value dropped 80% during an extreme volatility event in February 2018 and the fund ultimately liquidated and closed, resulting in losses for Geneos customers. By virtue of the foregoing, Geneos violated FINRA Rules 3110 and 2010. Between April 27, 2018 and June 26, 2018, Geneos negligently omitted to tell three investors in an offering related to GPB Capital Holdings, LLC (GPB Capital) that the issuer failed to timely make required filings with the Securities and Exchange Commission, including filing audited financial statements. By virtue of the foregoing, Geneos violated FINRA Rule 2010.”
For a copy of the FINRA sanction, click here.
For a copy of Geneos Wealth Management’s FINRA BrokerCheck, click here.
We Help Investors Recover Investment Losses
Alternative investments are not regulated by the U.S. Securities and Exchange Commission (SEC), and are often subject to fraud and other schemes. Examples include commodities, hedge funds, real estate, derivatives contracts, private equity, managed futures, and venture capital. They are not typically regulated by the SEC, nor are they usually liquid or easy to value, which makes them risky investments. In addition, alternative investments are often open only to accredited investors with an income of $200,000 or more or a net worth in excess of $1M; they also require high up-front minimums. When these opportunities are opened to non-accredited investors, it may be because of unsuitability, fraud, selling away or misrepresentation, and the investor may incur losses.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the financial advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at (800) 931-8452 or by email at email@example.com.