FINRA issued a $1.5 million penalty to Worden Capital Management, including $1.2 million in restitution and a $350,000 fine, for supervisory and other violations that resulted in excessive trading by the firm's representatives of customer accounts.
Investigators found that from 2015 through 2019, Worden Capital Management and CEO Jamie Worden's failure to establish and enforce an adequate supervisory system resulted in unsuitable recommendations and excessive trades in customer accounts, causing customers to incur $1.2 million in commissions and other realized losses.
For example, FINRA described one customer who incurred realized losses of over $1 million, including $285,169 in commissions, after at least one Worden Capital broker effected 635 trades in the customer's account over the period of two years.
Other customers suffered losses in the hundreds of thousands of dollars, including a customer who lost nearly $120,000—due in large part to significant commission charges and fees—when that customer's stockbroker made 313 trades in just 10 months from 2016 to 2017.
Even worse, according to the report, Worden Capital Management actively interfered with customer requests to transfer their accounts from Worden to another broker-dealer and failed to timely disclose customer arbitrations. FINRA found that Worden's interference caused its clearing firm to restrict 288 customer accounts associated with 13 former representatives who partook in the systemic misconduct.
In addition to fining the firm $350,000 and ordering restitution of $1,246,471, FINRA suspended CEO Jamie Worden and fined him, personally, $15,000.
If you have invested with a broker or financial adviser at Worden Capital Management or any other firm whose unsuitable recommendations or excessive trading in your account has resulted in losses which may include significant sales charges, fees, or commissions, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.