A Financial Industry Regulatory Authority (FINRA) complaint has been filed against William Athas, formerly a broker with Worden Capital and K.C. Ward Financial, in January 2022. The complaint is for excessive trading in nine accounts of seven different customers between December 2014 and April 2020, while working with the two firms named above.
What is excessive trading?
When a financial recommends a high number of transactions to be carried out by a customer, that does not take her any closer to her investment goals any more than a fewer number of transactions would, and that results in the generation of commissions for the broker and the firm, the practice is referred to as excessive trading.
Financial advisors’ excessive trading or “churning” is a form of fraudulent behavior. This can lead to a Financial Industry Regulatory Authority claim for damages. Investors can suffer significant losses from excessive trading, but it also benefits the stockbrokers and the brokerage firms they work for.
How excessive trading works
Excessive trading is when a stockbroker trades beyond an investor’s goals to earn commissions. It is possible to be in breach of fiduciary duty if the investment strategy recommended has as its sole purpose the enrichment of the brokerage company and/or stockbroker through the generation of excessive fees or commissions.
A claim against a financial advisor or brokerage firm will normally be successful if the investor can show the following:
- The activity on the account was controlled by the stockbroker and not the investor.
- Based on the investor’s investment goals and risk tolerance, the activity in the account reached excessive trading (or churning).
Investors who believe they have been victim to excessive trading or churning may file an arbitration claim against their brokerage firm. In determining whether the stockbroker exercised sufficient control over the account, the arbitrator or securities arbitration panel will consider the following factors:
- Client sophistication may include education or occupation.
- Trust and confidence in the stockbroker by clients
- The client devotes time to independent research.
- The client has previous experience in securities investments.
- The extent to which the client comprehends the investment strategy.
The case of William Athas at Worden Capital
The accounts in question were opened by Athas through cold calling prospects and presenting himself as a sophisticated advisor and made promises of significant returns. The excessive trading, or churning, in these accounts, led to a bill for $1.6 million in fees and commissions and losses that amounted to $1.1 million.
Legal angle
In view of the FINRA complaint, fraud lawyers Haselkorn & Thibaut (InvestmentFraudLawyer.com), a leading national securities law firm that represents retail and institutional investors throughout the world in securities-related matters that are often large and complex, are investigating the former Worden Capital and K.C. Ward Financial Broker for misconduct.
Haselkorn & Thibaut has an enviable track record and has recovered millions for investors in FINRA arbitrations. It has offices in New York, Texas, Arizona, North Carolina, and Florida.
This release is to request investors who have dealt with Athas and have lost in excess of $250,000, and others who have information that could be relevant for investigators, especially concerning his handling of customer accounts, are requested to contact Haselkorn & Thibaut, P.A. at 1-800-856-3352
