REGORY DEAN Barred by FINRA
On August 15, 2019, the Financial Industry Regulatory Authority (“FINRA”) barred Worden Capital Management LLC securities broker Gregory Dean (CRD#: 4922996, Rockville Centre, NY) for unsuitable trading and churning. Evidently, Dean, a general securities representative and securities principal who worked for brokerages including Worden Capital Management (2014 – 2019) and J.D. Nicholas & Associates, Inc. (2007 – 2014), executed a Letter of Acceptance, Waiver and Consent (“AWC”) in which he accepted FINRA’s sanctions and findings of him violating federal securities laws and FINRA rules. Here’s more on the AWC:
Dean Engages In Churning And Unsuitable Trading Of 7 Worden Client Accounts
Evidently, Gregory Dean used his de facto control of 7 client accounts from 2014 to 2017. He used this control to engage in churning and unsuitable trading in violation of FINRA Rules 2111, 2020 and 2010, Section 10(b) of the Exchange Act, and Rule 10b-5.
Specifically, a turnover rate represents how many times a securities portfolio is exchanged for another securities portfolio. This rate indicates excessive trading when rate equal to 6 or more. Supposedly, Gregory Dean caused clients’ accounts to exhibit annualized turnover rates between 30.99 and 92.12. Secondly, a cost-to-equity ratio shows how much the account must appreciate to cover commissions and expenses. This ratio indicates excessive trading when higher than 20%. Evidently, Dean caused clients’ accounts to exhibit cost-to-equity ratios between 38.1% and 132.97%. Apparently, Dean’s trading caused the 7 clients to experience more than $1,800,000 in losses. Notably, he generated more than $700,000 in commissions, margin interest and fees from those clients.
FINRA says Gregory Dean excessively traded accounts using a short-term trading strategy. Supposedly, he bought and sold the same securities multiple times in clients’ accounts over a short period of time. FINRA reported that Dean showed “reckless disregard” for his clients’ interests given his actions. His trading was unsuitable for the 7 clients based on their investment profiles. Not only that, but the AWC reports that it was not really possible for clients to earn a profit due to the high volume of trading.
SEC Bars Dean From Securities Industry
Shortly before FINRA executed the AWC barring Gregory Dean, SEC took action to remove him from the securities industry. Specifically, SEC issued an Administrative Order on June 26, 2019 barring Dean in various capacities including as a broker or investment adviser. The Order comes after SEC filed a Complaint against Dean alleging he violated Securities Act of 1933 and Exchange Act of 1934. Specifically, SEC claimed Dean made unsuitable recommendations to 27 J.D. Nicholas clients. The Complaint also alleges that he churned 3 clients’ accounts. Also before SEC issued the Order, a June 10, 2019 final judgment enjoined Dean from committing federal securities laws infractions. Worden Capital Management disaffiliated with Dean because of SEC’s Order.
Clients File Disputes About Dean Suggesting He Churned Their Accounts, Violated Securities Laws
From November 2013 to July 2019, 14 clients of either Worden Capital Management or J.D. Nicholas brought complaints or FINRA Arbitrations to contest Gregory Dean’s sales practices. 11 of the 14 disputes settled through payments to clients while 3 are ongoing. Notably, clients’ causes of action include unsuitability, excessive trading, unauthorized transactions, churning, misrepresentation and omissions, negligence, breach of fiduciary duty, breach of contract, and violations of federal securities laws and FINRA rules. Mainly, clients took issue with Dean’s trading of stocks and OTC equities which produced massive losses for clients.
Did you experience investment losses from Worden Capital Management securities broker Gregory Dean? If so, contact Soreide Law Group at (888) 760-6552 and speak with experienced counsel about a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered millions of dollars for clients who have suffered losses due to misconduct of brokers and brokerage firms.