FINRA announced last week that it sanctioned Worden Capital Management LLC (WCM) more than $1.5 million, including approximately $1.2 million in restitution to customers whose accounts were excessively traded by the firm’s representatives, and a $350,000 fine for supervisory and other violations. WCM must also retain an independent consultant to conduct a comprehensive review of the relevant portions of the firm’s supervisory systems and procedures.
FINRA found that from January 2015 to October 2019, WCM and
the firm’s owner and CEO, Jamie Worden, failed to establish and enforce a
supervisory system reasonably designed to achieve compliance with FINRA’s rules
relating to excessive trading. As a result, WCM’s registered representatives
made unsuitable recommendations and excessively traded customers’ accounts,
causing customers to incur more than $1.2 million in commissions..
Jessica Hopper, Head of FINRA’s Department of Enforcement,
said, “FINRA has an unwavering commitment to protect investors from excessive
and unsuitable trading. Firms must ensure they establish systems and procedures
reasonably designed to supervise representatives’ recommendations to their
customers, and firms’ supervisory personnel must have in place the necessary
tools and training to address red flags.”
FINRA also found that WCM and Worden interfered with
customers’ requests to transfer their accounts to another member firm. Finally,
as a result of supervisory failures, WCM failed to timely file amendments to
registered representatives’ Form U4s and Form U5s to disclose the filing or
resolution of customer arbitrations[1].
[1] Michelle,
Ong. (2020, December 31). FINRA Orders Worden Capital Management LLC to Pay More
than $1.2 Million in Restitution to Customers Whose Accounts Were Excessively
Traded. Retrieved January 05, 2021, from
https://www.finra.org/media-center/newsreleases/2020/finra-orders-worden-capital-management-llc-pay-more-12-million
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