Unsuitable Investment Recommendations with Former Worden Capital Management LLC Broker William Athas

Worden Capital Management LLC

Erez Law is currently investigating former Worden Capital Management LLC broker William Athas (CRD# 3165470) regarding unsuitable investment recommendations and excessive trading. William Athas was registered with SW Financial in Melville, New York from 2020 to 2021. Previously, he was registered with Worden Capital Management LLC in Melville, New York from 2016 to 2020 and with K.C. Ward Financial in Ronkonkoma, New York from 2014 to 2016. 

In September 2020, FINRA brought disciplinary action against William Athas alleging that he churned customer accounts and made unsuitable recommendations and engaged in excessive and concentrated trading.

In January 2022, FINRA barred William Athas alleging that he “controlled the trading in the customer accounts, the volume and frequency of trading in the accounts, decided what securities to buy and sell, the quantity of each transaction, and the timing of each transaction. Athas also determined the commission he would charge for each transaction. The customers routinely followed Athas’ recommendations. Athas deliberately incurred unreasonably high trading costs in these customers’ accounts, which made it virtually impossible for the accounts to be profitable. Athas persisted in his trading activity even after being warned about the excessive level of trading and high costs in these customer accounts on several occasions. The complaint also alleges that Athas’ trading in these accounts was excessive and quantitatively unsuitable for each of the customers based on their investment profiles, as evidenced by the high turnover rates and cost-to-equity ratios, the frequency of the transactions, and the transaction costs incurred. Athas’ churning and excessive trading caused the customers to pay approximately $1.6 million in commissions and other trading costs and to suffer approximately $1.1 million in losses. Conversely, Athas generated commissions of approximately $1.5 million for himself and his member firms. The complaint further alleges that Athas recommended that the customers engage in short-term, in-and-out trading, often on margin, without having a reasonable basis to recommend that trading strategy to his customers. Athas’ recommended strategy therefore was not suitable. Athas failed to perform reasonable diligence to understand the cumulative costs of his trading, including commissions, other trading costs, and margin interest. Athas also failed to perform reasonable diligence to understand the impact of these cumulative costs on the value of his customers’ accounts or the ability of his customers to earn a profit. Athas also failed to understand turnover rates and cost-to-equity ratios, and therefore failed to calculate and consider these metrics when recommending and executing a short-term, in-and-out trading strategy in his customers’ accounts.”

William Athas Customer Complaints

William Athas has been the subject of nine customer complaints between 2001 and 2020, two of which were denied, according to his CRD report. Recent complaints are regarding:

May 2020. “Unsuitable trading; common law fraud; churning; breach of contract; negligent supervision; breach of fiduciary duty. Dates of activity 5/2/2019 to 4/23/2020.” The customer is seeking $84,932.35 in damages and the case is currently pending. The complaint took place while he was registered with Worden Capital Management LLC.

January 2017. “Violations of Texas State Securities Act, Negligence and gross negligence, Breach of Contract, Breach of Fiduciary Duty, Misrepresentations and Omissions; and Violation of FINRA rules and industry standards of conduct regarding: Churning, Unauthorized Trading (unauthorized use of discretion)suitability, Know Your Customer Rules, Excessive trading, Unauthorized use of margin, Duty of good faith and fair dealing, Equitable principles of trade, use of Manipulative, Deceptive or Fraudulent Devices or contrivances. Dates of alleged activity was November 2014 through December 2015.” The customer sought $290,000 in damages and the case was settled for $95,000. The complaint took place while he was registered with K.C. Ward Financial. 

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Worden Capital Management LLC may be liable for investment or other losses suffered by William Athas’ customers.

Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.

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Author: Jeffrey Erez

The founder of Erez Law, Jeffrey Erez, focuses exclusively on securities arbitration and litigation. Mr. Erez passionately believes in representing aggrieved investors and obtaining justice for his clients through litigation.