Former Worden Capital Management LLC Broker, Christopher Orlando, BARRED by FINRA for Excessively Trading 13 Accounts

On July 1, 2021, the Financial Industry Regulatory Authority (“FINRA”) and broker Christopher Orlando entered into a Letter of Acceptance, Waiver, and Consent No. 2017056432603 after FINRA alleged that from October 2015 through December 2018, Mr. Orlando excessively traded 13 accounts of 12 customers in violation of Rules 2111 and Rule 2010.  The alleged conduct occurred when Mr. Orlando was associated with Legend Securities (2015-2016) and Worden Capital Management LLC (2016-2019).

As part of the settlement terms with FINRA, Mr. Orlando consented to a bar from associating with any FINRA member brokerage firm in any capacity.

If you have suffered financial losses investing with Christopher Orlando or Worden Capital Management LLC, or suspect that Mr. Orlando did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your legal rights.

Iorio Altamirano LLP  represents investors that have disputes with their financial advisors or brokerage firms, such as Worden Capital Management.

Worden Capital Management

According to a 2017 investigation by Reuters, Worden Capital Management hired more brokers with a history of significant disclosures than all but twenty-three other firms in the country. In 2021, Iorio Altamirano LLP set out to update that analysis.

The investigation revealed that fifty-four percent (54%) of Worden Capital Management’s brokers and supervisors have significant “red flag” public disclosures.  Significant red flag disclosures include:

• regulatory sanctions,
• terminations of employment after allegations of misconduct,
• customer disputes that result in an award or settlement, and
• prior association with a firm that FINRA has expelled.

You can read the full investigative report here:  Investigative Report:  Worden Capital Management LLC’s Owners, Executives, and Brokers Have Concerning Red Flag Disclosures

FINRA Letter of Acceptance, Waiver, and Consent No. 2017056432603

FINRA and Mr. Orlando entered into a Letter of Acceptance, Waiver, and Consent No. 2017056432603 on July 1, 2021, after FINRA alleged that between October 2015 and December 2018, Mr. Orlando excessively traded 13 accounts of 12 customers in violation of Rules 2111 and Rule 2010.  Specifically, FINRA alleged:

• During the relevant period, Mr. Orlando engaged in quantitatively unsuitable trading in 13 customer accounts held by a total of 12 customers (one customer held two accounts).
• Orlando recommended high-frequency trading in the 13 customer accounts, and he often recommended the sale of one security and the simultaneous investment of the sale proceeds into a new security within short time periods.
• Orlando’s customers routinely followed his recommendations, and as a result, Mr. Orlando exercised de facto control over the customers’ accounts.

Excessive trading occurs when a financial advisor makes many trades in a customer’s account, not to benefit the customer but to generate commissions for the broker.

There are two primary indicators used to evaluate whether a financial advisor excessively traded an account.  The first is turnover rate, which represents the number of times a portfolio of investments is replaced for another portfolio of investments.  Generally, a turnover rate of six suggests excessive trading, but a turnover rate below four can be excessive in some cases.  According to FINRA, the accounts at issue had annualized turnover rates of between 6.15 and 56.39.

The second indicator used to assess whether trading is excessive in an investment account is its cost-to-equity ratio.  The cost-to-equity ratio measures the amount an account must appreciate to cover commissions and other expenses.   That is, how much the account needs to grow just to break even.  A cost-to-equity ratio of 20% generally indicates excessive trading has occurred.   According to FINRA, the accounts at issue had annualized cost-to-equity ratios of between 26.12% and 215.61%.

Excessive trading is an unethical and illegal practice.  It is also a violation of securities rules and regulations and can cause enormous harm to customers.

Mr. Orlando’s trading of the 13 accounts resulted in high turnover rates and cost-to equity ratios, as well as significant losses, as set forth below:

• From November 2016 to September 2017, while associated with Worden Capital Management LLC, Mr. Orlando effected 313 trades in Customer 1’s account, resulting in a turnover rate of 23.04 (equivalent to an annualized turnover rate of 25.13) and a cost-to-equity ratio of 94.57% (equivalent to an annualized cost-to-equity ratio of 103.17%). Mr. Orlando’s trading in Customer 1’s account generated total trading costs of $236,735, including $205,557 in commissions and $22,601 in margin interest, and caused $118,490 in realized losses.
• From October 2017 to August 2018, while associated with Worden Capital Management LLC, Mr. Orlando effected 29 trades in Customer 2’s account, resulting in a turnover rate of 34.57 (equivalent to an annualized turnover rate of 37.72) and a cost-to-equity ratio of 164.65% (equivalent to an annualized cost-to-equity ratio of 179.62%). Mr. Orlando’s trading in Customer 2’s account generated total trading costs of $14,293, including $10,175 in commissions and $429 in margin interest, and caused $34,983 in realized losses.
• From February 2016 to November 2016, while associated with Legend Securities, Inc., Mr. Orlando effected 50 trades in Customer 3’s account, resulting in a turnover rate of 46.99 (equivalent to an annualized turnover rate of 56.39) and a cost-to-equity ratio of 179.67% (equivalent to an annualized cost-to-equity ratio of 215.61%). Orlando’s trading in Customer 3’s account generated total trading costs of $16,345, including $13,565 in commissions and $320 in margin interest, and caused $12,799 in realized losses.
• From January 2016 to November 2016, while associated with Legend Securities, Inc., Mr. Orlando effected 42 trades in Customer 4’s account, resulting in a turnover rate of 43.04 (equivalent to an annualized turnover rate of 46.95) and a cost-to-equity ratio of 170.59% (equivalent to an annualized cost-to-equity ratio of 186.10%). Orlando’s trading in Customer 4’s account generated total trading costs of $14,524, including $12,055 in commissions and $403 in margin interest, and caused $14,816 in realized losses.
• From October 2016 to November 2018, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 84 trades in Customer 5’s account, resulting in an annualized turnover rate of 27.46 and an annualized cost-to-equity ratio of 125.67%. Orlando’s trading in Customer 5’s account generated total trading costs of $53,118, including $45,767 in commissions and $3,590 in margin interest, and caused $34,216 in realized losses.
• From January 2017 through December 2018, while associated with Worden Capital Management LLC, Orlando effected 95 trades in Customer 6’s account, resulting in an annualized turnover rate of 30.10 and an annualized cost-to-equity ratio of 139.85%. Orlando’s trading in Customer 6’s account generated total trading costs of $64,647, including $57,052 in commissions, and caused $32,335 in realized losses.
• From April 2016 to December 2018, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 76 trades in Customer 7’s account, resulting in an annualized turnover rate of 6.15 and an annualized cost-to-equity ratio of 26.12%. Mr. Orlando’s trading in Customer 7’s account generated total trading costs of $35,954, including $30,576 in commissions, and caused $47,377 in realized losses.
• From February 2016 to February 2017, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 76 trades in Customer 8’s account, resulting in an annualized turnover rate of 55.80 and an annualized cost-to-equity ratio of 202.11%. Mr. Orlando’s trading in Customer 8’s account generated total trading costs of $34,935, including $30,200 in commissions and $990 in margin interest, and caused $16,370 in realized losses.
• From July 2017 to February 2018, while associated with Worden Capital Management LLC, Mr. Orlando effected 27 trades in Customer 9’s account, resulting in a turnover rate of 53.22 (equivalent to an annualized turnover rate of 79.83) and a cost-to-equity ratio of 249.80% (equivalent to an annualized cost-to-equity ratio of 374.70%). Orlando’s trading in Customer 9’s account generated total trading costs of $13,390, including $10,330 in commissions and $225 in margin interest, and caused $15,777 in realized losses.
• From September 2016 through January 2018, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 61 trades in Customer 10’s account, resulting in an annualized turnover rate of 35.32 and an annualized cost-to-equity ratio of 165.57%. Mr. Orlando’s trading in Customer 10’s account generated total trading costs of $30,641, including $26,866 in commissions and $1,304 in margin interest, and caused $28,018 in realized losses.
• From October 2015 to February 2018, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 66 trades in Customer 11’s Account A, resulting in an annualized turnover rate of 21.82 and an annualized cost-to-equity ratio of 105.72%. Mr. Orlando’s trading in Customer 11’s Account A generated total trading costs of $20,344, including $16,978 in commissions and $654 in margin interest, and caused $15,378 in realized losses.
• From August 2016 to December 2017, while associated with Legend Securities, Inc. and then Worden Capital Management LLC, Mr. Orlando effected 63 trades in Customer 11’s Account B, resulting in an annualized turnover rate of 9.89 and an annualized cost-to-equity ratio of 43.62%. Mr. Orlando’s trading in Customer 11’s Account B generated total trading costs of $29,523, including $26,381 in commissions, and caused $49,708 in realized losses.
• From January 2017 to December 2018, while associated with Worden Capital Management LLC, Mr. Orlando effected 41 trades in Customer 12’s account, resulting in an annualized turnover rate of 18.63 and an annualized cost-to-equity ratio of 85.54%. Mr. Orlando’s trading in Customer 12’s account generated total trading costs of $16,767, including $11,370 in commissions and $964 in margin interest, and caused $63,413 in realized losses.

Mr. Orlando’s trading in these customers’ accounts was excessive and unsuitable given the customers’ investment profiles. As a result of Mr. Orlando’s excessive trading, the customers suffered collectively realized losses of $483,680 while paying total trading costs of $581,216, including commissions of $496,872.

Financial Advisor Christopher George Orlando (CRD No. 4136262)

Martin Christopher Orlando had 18 years of experience in the securities industry and has been associated with ten different broker-dealers, including two firms that FINRA has expelled:

• Spartan Capital Securities, LLC, from July 2020 to May 2021.
• Bernard Financial Services, Inc., from December 2019 to January 2020.
• Worden Capital Management LLC, from November 2016 to December 2019.
• Legend Securities, Inc. (expelled by FINRA), from July 2015 to November 2016.
• National Securities Corporation, from December 2013 to July 2015.
• Joseph Gunnar & Co. LLC, from June 2012 to December 2013.
• Brookstone Securities, Inc. (expelled by FINRA), from October 2009 to June 2012.
• P. Turner & Company, L.L.C., from August 2006 to November 2009.
• Gunnallen Financial, Inc., from August 2005 to August 2006.
• Joseph Stevens & Company, Inc., from December 2002 to August 2005.

FINRA’s BrokerCheck tool can be used to obtain Mr. Orlando’s complete and updated disclosure reports.

Worden Capital Management LLC – A Duty to Supervise

Financial institutions like Worden Capital Management LLC must properly supervise financial advisors and customer accounts.  Brokerage firms must establish and maintain a reasonably designed system to oversee account activity, such as excessive trading, to ensure compliance with securities laws and industry regulations.   When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have suffered investment losses with Christopher George Orlando or Worden Capital Management LLC or suspect other inappropriate activity occurred in your investment or retirement account, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP.  August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential review of your legal rights.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY.   Iorio Altamirano LLP pursues FINRA claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.