FINRA Imposes $1.5 Million Fine on Worden Capital Management

The Financial Industry Regulatory Authority (FINRA), a not-for-profit organization regulating the brokerage firms doing business with the public in the United States, has ordered Worden Capital Management (WCM), a full service regional Broker Dealer, to pay a fine of $1.5 million to settle with it.

According to the regulator, between January 2015 to October 2019, the firm's registered representatives made unsuitable recommendations and excessively traded customers' accounts, causing customers to incur more than $1.2 million in commissions.

Further, WCM and its CEO, Jamie Worden, did not maintain a supervisory system reasonably designed to comply with FINRA's rules relating to excessive trading, and did not take action to investigate or stop the trading in this customer's account.

FINRA mentioned that WCM and Worden also interfered with customers' requests to transfer their accounts to another member firm.

Jessica Hopper, Executive Vice President and 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.”

In order to settle with the FINRA, the company agrees to pay more than $1.2 million in restitution to customers whose accounts were excessively traded, and pay $350,000 for supervisory and other violations.