Donald Joseph Fowler of Rockville Center New York a stockbroker formerly registered with Worden Capital Management LLC has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that Fowler churned and excessively traded the accounts of four of his customers. Letter of Acceptance Waiver and Consent No. 2017056432606 (Aug. 25, 2021).

According to the AWC, from December of 2014 to December of 2018, Fowler maintained control over customers’ accounts because customers frequently approved his recommendations. His investment strategy primarily consisted of making frequent in-and-out trades and using margin to enhance customers’ purchasing power. But this involved excessive and unsuitable trading that caused customers to experience losses.

FINRA stated that between December of 2014 and May of 2016, 1,419 trades were made by Fowler in the account of Customer 1. That customer’s account had an annualized cost-to-equity ratio of 77.75 percent and an annualized turnover rate of 114.47. The trades generated $766,256.00 in costs which was comprised of $74,488.00 in margin interest and $664,797.00 in commissions. The AWC noted that the customer incurred $755,727.00 in realized losses because of Fowler’s trading.

Customer 2’s account was subjected to 53 trades executed by Fowler between September of 2015 and January of 2017. Those transactions resulted in the customer having an annualized cost-to-equity ratio of 71.19 percent and annualized turnover rate of 29.23. FINRA stated that Fowler’s trading generated $5,898.00 in margin interest and $53,440.00 in commissions for total costs of 60,824.00. The customer realized losses of $29,736.00.

In Customer 3’s case, between June of 2016 and March of 2017, 65 trades were made by Fowler. The customer’s account had an annualized cost-to-equity ratio of 73.22 percent and an annualized turnover rate of 32.70. This resulted in the customer realizing $118,137.00 in losses after paying margin interest of $4,473.00 in commissions of $35,365.00 for total costs of $41,609.00.

The AWC stated that between April of 2015 and December of 2018, Customer 4’s account was exposed to 193 trades. Fowler caused the account to have an annualized cost-to-equity ratio of 43.90 percent and an annualized turnover rate of 16.68. The trades led to $271,930.00 in trading costs. This included margin interest of $70,836.00 and $195,754.00 in commissions. That customer’s account had realized losses of $192,178.00.

FINRA determined that Fowler’s trading was unsuitable and excessive. He violated FINRA Rules 2010, 2020 and 2111 in addition to Securities Exchange Act of 1934 Section 10(b) and SEC Rule 10b-5.

Fowler was ordered to pay a $1,950,000.00 civil penalty and enjoined from committing further violations of federal securities laws after a jury found that Fowler violated Securities Exchange Act of 1934 by advising customers to take part in an investment strategy when he lacked an adequate reason to conclude that the strategy was appropriate. Fowler was found by that jury to have effected fraudulent trades in 13 customers’ accounts.

FINRA Public Disclosure shows that Fowler has been identified in 14 customer initiated investment related disputes concerning accusations of his wrongful actions while employed by securities broker dealers including Worden Capital Management. On May 22, 2017, a customer initiated investment related FINRA securities arbitration claim regarding Fowler’s conduct was settled for $400,000.00 in damages based upon allegations of fraud and breach of fiduciary duty at Worden Capital Management. FINRA Arbitration No. 16-01503. The claim alleges churning and unauthorized trading.

On August 20, 2020, another customer initiated investment related FINRA securities arbitration claim concerning Fowler’s conduct was resolved for $120,000.00 in damages founded on accusations that between March of 2015 and January of 2018, there was a breach of contract and breach of fiduciary duty by Fowler concerning stock and equipment leasing securities trades. FINRA Arbitration No. 19-02335. The claim alleges fraud and violation of GA Uniform Securities Act.

Fowler is also the subject of a customer initiated investment related FINRA securities arbitration claim where the customer requested $27,410.00 in damages based upon allegations that transactions executed in the customer’s account were not suitable and that misrepresentations and omissions had been made by Fowler regarding stock trades. FINRA Arbitration No. 20-00801 (Nov. 19, 2020).

Fowler was registered with Worden Capital Management between November 21, 2014 and August 1, 2019.

Tags: ,

Comments are closed.