Can I Recover Losses from Worden Capital Management LLC Brokers Donald Fowler and Gregory Dean?
Posted on Saturday, June 2nd, 2018 at 11:58 am
In March 2020, The Securities and Exchange Commission (SEC) brought a civil injunctive action against Fowler in the United States District Court for the Southern District of New York. “The Commission’s complaint alleged that Fowler recommended to customers a pattern of high cost, in-and-out trading without any reasonable basis to believe that his recommendations were suitable for anyone. The Commission’s complaint also alleged that Fowler’s recommendations resulted in losses for the customers and ill-gotten gains for Fowler; that Fowler churned customer accounts; and that Fowler made unauthorized trades.”
In August 2019, FINRA barred Dean after he “consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 and violated FINRA Rules 2020 by engaging in churning and quantitatively unsuitable trading in the accounts of customers. The findings stated that Dean made all trading decisions in the customers’ accounts, including which specific securities to buy and sell, and when to buy and sell the securities, and the quantity of securities to buy and sell. Dean recommended the trading in the customers’ accounts and each of the customers followed Dean’s recommendations. Dean therefore exercised de facto control over these customers’ accounts. The trading by Dean in the customers’ accounts was excessive and conducted with reckless disregard for the customers’ interests. Dean employed an investment strategy that entailed short-term in-and-out trades, and he used margin as a means to increase the buying power in his customers’ accounts. Dean’s trading in the customers’ accounts resulted in more than $1,834,832 in cumulative losses while generating more than $715,930 in commissions, fees and margin interest charged to the customers. The level of trading activity in these accounts, which Dean controlled, made it nearly impossible to generate trading.”
In June 2019, the SEC barred Fowler regarding his participation in the offering of a penny stock.
In January 2017, the Securities and Exchange Commission (SEC) charged two Fowler and Dean with fraudulently using an in-and-out trading strategy that was unsuitable for customers in order to generate hefty commissions for themselves. The SEC alleges that Fowler and Dean recommended to customers a high-cost trading strategy consisting of the excessive buying and selling of stocks, resulting in substantial commissions and other fees for the duo and enormous losses for their clients.
Dean was registered with Worden Capital Management LLC in Garden City, New York from 2014 to 2019, when he was terminated regarding, “Individual is subject to a permanent bar. SEC Admin Release 34-86196 / June 26, 2019: The Securities and Exchange Commission deems it appropriate and in the public interest that public administrative proceedings be instituted against Gregory T. Dean (“Dean” or “Respondent”). On the basis of this Order and Respondent’s Offer, the Commission finds that on June 10, 2019, a final judgment was entered by consent against Dean, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Gregory T. Dean, Civil Action” Number 17-CV-139 (GHW), in the United States District Court for the Southern District of New York.
Previously, he was registered with J.D. Nicholas & Associates, Inc. in Syosset, New York from 2007 to 2014.
Fowler has been the subject of 13 customer complaints between 2011 and 2019, one of which was closed without action, according to his CRD report. Recent complaints are regarding:
October 2019. “Breach of fiduciary duty; negligence; negligent supervision; fraud; breach of contract; violation of GA Uniform Securities Act. Dates of alleged activity: March 2015 through January 2018.” The customer is seeking $100,000 in this pending complaint.
August 2019. “Fraud, negligent misrepresentation, breach of fiduciary duty and breach of the covenants of good faith and fair dealing, negligent supervision, breach of conduct, Section 20 violations, respondeat superior.” The customer sought $25,000 in damages and the complaint was settled for $7,500.
Dean has been registered with Worden Capital Management LLC in Garden City, New York since 2014. Previously, he was registered with J.D. Nicholas & Associates, Inc. in Syosset, New York from 2007 to 2014.
Dean has been the subject of 13 customer complaints between 2013 and 2019, according to his CRD report. Recent complaints are currently pending:
February 2019. “Excessive Commission, Churning, and Unsuitable Transactions.” The customer sought $70,766.80 in damages and the case was settled for $19,999.
August 2017. “Churning; unsuitability; breach of fiduciary duty; common law fraud; breach of contract; negligent supervision. Activity dates May 2015 through June 2017.” The customer sought $150,000 in damages and the case was settled for $60,000.
July 2017. “Unsuitability and overconcentration; excessive trading and margin abuse; failure to supervise; breach of fiduciary duty; negligence; fraudulent misrepresentation; and, breach of contract. Activity dates September 2010 to November 2016.” The customer sought $586,840 in damages and the case was settled for $55,000.
December 2016. “Excessive trading, Churning, Unsuitability, Unauthorized Transactions, Failure to Supervise, Respondeat Superior, Ownership Liability.” The customer sought $2,115,095 in damages and the case was settled for $42,500.
September 2016. “Kitchen sink claim filed by an unscrupulous agency potentially representing a former client of over 4 years ago. False allegation claims consisting of suitability, unauthorized trading, supervision, concentration, FINRA Rules 2110 and 2111.” The customer is seeking $420,847 and the case is currently pending.
June 2016. “Churning and excessive trading, unsuitability, violation of FINRA rules, state blue sky laws, and section 1o(b) and rule lob-5 of the exchange act of 1934, violation of FINRA rules 2010, IM-23i0-2, and 2o2o, failure to supervise, allegation period 05/07/2015 to 01/07/2016.” The customer sought $133,434 and the case was settled for $40,000.
June 2016. “Churning and excessive trading, unsuitability, violation of FINRA rules, state blue sky laws, and section 1o(b) and rule lob-5 of the exchange act of 1934, violation of FINRA rules 2010, IM-23i0-2, and 2o2o, failure to supervise, allegation period 05/07/2015 to 01/07/2016.” The customer sought $133,434 in damages and the case was settled for $40,000.
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 Fowler and Dean’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and 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.