David Flinchum was Accused of Fraud? Find Out More (2024)

Would you work with a financial advisor that relies on misleading marketing? If you think such advisors don’t exist, then look no further than David Flinchum.

Him (or his alleged marketers) have flooded the internet with press releases and whatnot to hide his criminal past.

Reputation laundering is a major issue and you’ll find plenty of promotional articles talking about his expertise. However, their sole purpose is to hide the fact that he faced allegations of fraud.

This article will go over the things his marketers are trying to hide:

David Flinchum was Fired by Bessemer Investor Services:

Bessemer Investor Services has dismissed David Flinchum (CRD # 5540399). This termination disclosure appears in his BrokerCheck record, which was retrieved on March 6, 2024. Continue reading if you have any queries about his reported behavior.

Reason for Termination

On February 6, 2024, Bessemer Investor Services dismissed David Flinchum due to suspicions that he neglected to declare a disclosable incident on his Form U4. The claims don’t describe what kind of disclosable incident it was.

Disclosable events on Form U4s include:

• Bankruptcies, Liens, and Judgments 
• Criminal charges
• Customer complaints

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade. Failing to disclose a reportable event may violate this rule. 

David Flinchum: What His Customers Say

Apart from the FINRA disclosure, I found a serious complaint against David Flinchum of Florida.

According to the reviewer, in 2003, the user visited the Edward Jones office on Baya Drive in Lake City, FL and followed their advice by investing in a mutual fund. Now, after well over a decade, it was revealed that a new law had been created, which required them to make changes to the account.

They informed me that there would be a charge of over $100 to facilitate the process. They refused to pay that, so another company was allowed to take over management of their mutual fund. A new company deducted $150 from the money in their mutual fund to open a new account. He considered it theft.

Charging $150 to open a new account for a mutual fund that had been purchased over a decade ago seemed unjustifiable. These individuals discovered a method to successfully commit theft without being caught.

They fought it, but had little faith that they would get their money back. The user vowed to never do business with Edward Jones again. They would never trust them again. Their reputation had become tarnished. It seemed as though they were caught up in a situation reminiscent of a mafia-style extortion.

About Bessemer Investor Services: The Company that Fired David Flinchum

Bessemer Investor Services, a division of Bessemer Securities, focuses on private equity investments. The firm’s primary focus is on collaborating with middle-market enterprises to drive development and increase value generation. Bessemer Investors stands apart with a flexible, long-term capital basis and a team of seasoned private equity specialists. This strategy enables for customized solutions that optimize long-term value for its partners and stakeholders.

Bessemer Investors, founded in 2018, follows the heritage of private investment organizations funded by the Phipps family, whose fortune stems from Henry Phipps’ collaboration with Andrew Carnegie. The firm’s investment criteria seek equity investments ranging from $50 million to $150 million in market-leading companies across a variety of industries, including aerospace, military, building goods, outsourcing services, and others.

Bessemer Investors takes pride in being a conscientious steward of enterprises, ensuring that value development benefits all stakeholders. The business provides various advantages, including no management fees, quick decision-making, transparency, and a strong network of contacts within the Bessemer ecosystem.

Bessemer Investors’ staff has considerable expertise from prominent private equity companies and focuses on providing great value via their investments. They are recognized for their ethics, long-term attitude, and dedication to supporting businesses.

Popular Fraud Cases Similar to David Flinchum Florida

Financial fraud is a major issue.

I’m sharing some popular past cases that involved financial fraud:

1. Bernie Madoff

Background: Bernie Madoff ran one of the most notorious Ponzi schemes in history, defrauding investors out of approximately $65 billion. Issue: Madoff promised consistent, high returns and used new investors’ money to pay off earlier investors, creating the illusion of a profitable business. Outcome: Madoff was arrested in 2008, pleaded guilty to 11 federal felonies, and was sentenced to 150 years in prison. His actions led to massive financial losses for thousands of clients and a loss of trust in the financial advisory industry.

2. Allen Stanford

Background: Allen Stanford was the chairman of Stanford International Bank, which was at the center of a $7 billion Ponzi scheme. Issue: Stanford lured investors with promises of high returns on certificates of deposit and used the funds for personal gain and to pay off earlier investors. Outcome: Stanford was convicted on multiple counts of fraud in 2012 and sentenced to 110 years in prison. His scheme caused severe financial damage to investors and highlighted the importance of regulatory oversight.

3. Anthony Fields

Background: Anthony Fields operated as an investment advisor without proper registration and compliance with federal regulations. Issue: Fields used LinkedIn and other social media platforms to offer fictitious securities and investment opportunities, misleading investors. Outcome: In 2012, the SEC charged Fields with fraud, and he was ordered to cease all such activities. This case underscored the risks of unverified financial advisors using online platforms to reach potential victims.

4. Dawn Bennett

Background: Dawn Bennett was a former investment advisor and radio host who engaged in fraudulent practices to attract and retain clients. Issue: Bennett made false performance claims about her investment strategy and used client funds for personal expenses, including luxury goods and services. Outcome: Bennett was found guilty of securities fraud in 2018 and sentenced to 20 years in prison. Her actions resulted in significant financial losses for her clients and emphasized the need for transparency and honesty in financial advisory services.

5. Martin Shkreli

Background: Martin Shkreli, also known as the “Pharma Bro,” was the CEO of Turing Pharmaceuticals and hedge fund manager. Issue: Shkreli used funds from his hedge funds to pay off unrelated business debts and misled investors about the financial health of his ventures. Outcome: In 2017, Shkreli was convicted of securities fraud and conspiracy to commit securities fraud, receiving a seven-year prison sentence. His case highlighted unethical behavior and the importance of fiduciary duty in managing clients’ investments.

These cases demonstrate the critical importance of regulatory compliance, ethical conduct, and transparency in financial advisory services. Investors should always perform thorough due diligence and seek advisors with a proven track record of integrity and trustworthiness.

Possible Risks of being advised by Unreliable Advisors

Being advised by a poor financial advisor can have significant and far-reaching negative consequences. Here are some of the key outcomes that clients may face:

1. Financial Losses

• Direct Losses: Poor investment decisions can lead to substantial losses in portfolio value. Advisors may recommend high-risk or unsuitable investments that fail to perform as promised.
• Fees and Penalties: Unnecessary or excessive fees, such as early withdrawal penalties or management fees, can erode investment returns over time.

2. Missed Financial Goals

• Retirement Savings: Inadequate or misguided advice can jeopardize retirement plans, leaving individuals without sufficient funds to support themselves in later years.
• Education Funding: Poor planning can result in insufficient savings for children’s education, leading to increased debt or limited educational opportunities.

3. Increased Debt

• Mismanagement: Advisors who fail to properly manage debt or recommend high-interest loans can increase a client’s debt burden, leading to financial strain and reduced credit scores.

4. Legal and Tax Issues

• Non-Compliance: Advising clients to engage in tax evasion or other illegal activities can result in legal penalties, including fines and imprisonment.
• Audit Risk: Poor tax advice can increase the likelihood of audits and associated penalties, creating additional stress and financial burden.

5. Emotional and Psychological Stress

• Anxiety and Stress: Financial instability and uncertainty can lead to significant emotional and psychological stress, affecting overall well-being and quality of life.
• Loss of Trust: Experiencing fraud or unethical behavior can lead to a loss of trust in financial institutions and advisors, making future financial planning more challenging.

6. Damaged Credit Score

• Poor Debt Management: Advisors who fail to prioritize debt repayment can damage clients’ credit scores, affecting their ability to secure loans, mortgages, or favorable interest rates in the future.

7. Opportunity Cost

• Missed Investment Opportunities: Ineffective financial advice can cause clients to miss out on lucrative investment opportunities, resulting in lower overall portfolio growth.
• Lost Time: Time spent dealing with the fallout of bad financial advice is time that could have been used more productively, both financially and personally.

8. Legal Recourse and Litigation

• Lawsuits: Clients may need to engage in costly and time-consuming legal battles to recover lost funds or seek justice for fraudulent or unethical behavior.
• Settlement Costs: Even if successful, legal proceedings can result in additional financial costs and stress.

9. Reputational Damage

• Public Record: Legal actions and financial disputes can become part of the public record, potentially damaging personal and professional reputations.
• Professional Impact: For business owners or professionals, financial mismanagement can harm business operations and professional relationships.

10. Long-Term Financial Instability

• Compound Effects: The cumulative impact of poor financial advice can lead to long-term financial instability, making it difficult to recover and build a secure financial future.

In conclusion, the consequences of being advised by a poor financial advisor extend beyond immediate financial losses. They can affect every aspect of a person’s financial health, from long-term goals and legal standing to emotional well-being and trust in financial systems. It’s crucial to conduct thorough research and due diligence when selecting a financial advisor to avoid these adverse outcomes.