FINRA Files Securities Fraud Charges Against NY Broker For Churning Accounts of Blind, 77-Year-Old Widow
The Financial Industry Regulatory Authority has filed a securities fraud case against Hank Mark Werner. The self-regulatory organization is accusing the New York broker of churning the account of a 77-year old widow who is blind, and engaging in unsuitable and excessive trading involving her account. FINRA claims that Werner charged the elderly customer over 243K in commissions while he churned her accounts for over three years and caused her to sustain about $184K in losses.
According to FINRA, Werner, who had been the broker of the elderly widow’s husband since 1995, until he passed away four years ago, started aggressively trading her accounts after he died. The SRO claims that Werner did this to earn excessive commissions.
From 10/12 to 10/15, Werner placed more than 700 trades in over 200 securities while charging the elderly customer commission or a markup on every sale and purchase. Because she was seriously debilitated, blind, and needed in-home care, the woman was totally dependent on Werner to let her know how her account was doing.
The commissions or markups Werner charged her at first were at 2.5-3%. When he moved to a different firm, he raised the charges to 3.75% – 4.25%.
FINRA said that because of the commissions charged and the trading levels involved it was unlikely that the elderly widow was ever going to make money from the trades.
Based on the customer’s financial state and investment goals, said the SRO, Werner had no reasonable grounds for believing that the trade recommendations he was making to the customer was suitable.
Churning involves the excessive selling or buying of securities by a broker in the account of a customer for the main purpose of earning a commission. If you suspect that you have been the victim of churning, contact our securities fraud law firm today.
Shepherd Smith Edwards and Kantas, LTD LLP has helped thousands of investors recoup their losses. Our elder financial fraud lawyers represent older investors and their families. Contact us today.
FINRA Files Complaint Charging Broker With Fraudulently and Excessively Trading Accounts of Elderly, Blind Widow, FINRA, August 1, 2016