The Financial Industry Regulatory Authority (“FINRA”) has suspended former Worden Capital Management LLC supervisor Henry Bones II. Mr. Bones consented to a two-month suspension from associating with any FINRA member in all principal capacities after FINRA alleged that he failed to reasonably supervise a former broker, Christopher Orlando, that excessively traded ten customer accounts.
Earlier this year, FINRA has barred Christopher Orlando from the securities industry for excessively trading his customers’ accounts. In December 2020, Worden Capital Management LLC was sanctioned more than $1.5 million by FINRA for, among other things, failing to establish, maintain and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with FINRA’s suitability rule as it pertains to excessive trading.
Mr. Bones, who was associated with Worden Capital Management LLC from November 2016 to December 2019, has a history of associations with firms that have been expelled by FINRA. He is currently registered with SW Financial in New York, NY.
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. 2017056432604
FINRA and Mr. Bones entered into a Letter of Acceptance, Waiver, and Consent on August 10, 2021, after FINRA alleged that between November 2016 and December 2018, Mr. Bonds, as a manager of a Worden Capital Management branch office, failed to reasonably supervise a former broker, Mr. Orlando, who excessively traded ten customers accounts. The ten accounts incurred realized losses of $415,626 while paying $423,987 in commissions.
Mr. Bones was aware of multiple red flags of excessive trading, including high cost-to-equity rations and high turnover ratios in Mr. Orlando’s customer accounts. According to FINRA, Mr. Bones did not reasonably investigate those red flags or otherwise take meaningful action to stop the misconduct. As a result, Mr. Bons violated FINRA rules 3110 and 2010.
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.
Excessive trading is unethical and illegal. It is also a violation of securities rules and regulations and can cause enormous harm to customers.
How to Recover Financial Losses or Obtain a Free Consultation
If you or a loved one were a customer of Worden Capital Management LLC and either sustained financial losses or suspect that your broker did not have your best interest in mind when recommending investments or making account transactions, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at firstname.lastname@example.org or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.