In a recent press release from the Financial Industry Regulatory Authority, Inc. (FINRA), it was announced that FINRA sanctioned Worden Capital Management LLC (WCM) over $1.5 million, which included approximately $1.2 million in restitution to clients whose accounts were allegedly excessively traded by the WCM’s representatives, and a $350,000 fine for supervisory and other violations. As part of FINRA’s settlement, WCM must also retain an independent consultant to do a comprehensive review of portions of the WCM’s supervisory systems and procedures.
According to FINRA, from January of 2015 to October of 2019, Worden Capital Management and the firm’s owner and CEO, Jamie Worden, allegedly failed to establish and enforce a supervisory system reasonably designed to achieve compliance with FINRA’s rules relating to excessive trading. Consequently, WCM’s registered representatives allegedly made unsuitable recommendations and excessively traded clients’ accounts, causing customers to incur more than $1.2 million in commissions.
FINRA gives an example of a WCM customer whose account was traded for approximately one year, alleging a cost-to-equity ratio, or breakeven point, of more than 100 percent and incurring realized losses of $118,490, inclusive of the $205,557 the customer paid in commissions. FINRA states that Worden Capital Management allegedly did not take action to investigate or stop the trading in this client’s account, or others like it, even though WCM had received a monthly active account report routinely flagging dozens of customer accounts which indicated excessive trading.
According to FINRA, WCM and Worden allegedly interfered with customers’ requests to transfer their accounts to another member firm. Also, as a result of supervisory failures, Worden Capital Management allegedly failed to timely file amendments to registered representatives’ Form U4s and Form U5s to disclose the filing or resolution of customer arbitrations.
FINRA states that for Jamie Worden’s alleged supervisory violation and his interference with customer account transfers, he agreed to a 15-day suspension in all capacities, a three-month supervisory suspension, a $15,000 fine and 20 hours of continuing education.
Worden Capital Management and Jamie Worden neither admitted nor denied FINRA’s charges, but consented to the entry of FINRA’s findings.
If you’ve suffered financial losses due to the actions or recommendations of Worden Capital Management, LLC contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee basis and represents clients nationwide before FINRA.