William Nicholas Athas, of Melville, New York, a stockbroker formerly registered with Worden Capital Management LLC, has been charged by Financial Industry Regulatory Authority (FINRA) with excessively trading and churning investor accounts when he was associated with Worden Capital Management. Department of Enforcement v. William Nicholas Athas, Disciplinary Action No. 2018057883102 (January 18, 2022).
According to the Complaint, between December of 2014 and April of 2020, during the time that Athas was employed by KC Ward Financial and Worden Capital Management, he executed excessive trades and had churned the accounts of seven customers. The complaint alleges that Athas maintained control over those customers’ accounts, and he would make short-term trades of equities continuously, driving up costs.
FINRA states that two-to-three percent commissions were charged to customers each time a security was bought or sold in their account. Athas purportedly used margin in some of those investors’ accounts. The complaint alleges that Athas’ activities resulted in the customer’s accounts having turnover rates ranging between 17 and 75 and cost-to-equity ratios ranging from 56 percent to 246 percent. Customers allegedly suffered $1,100,000.00 in losses while having to pay $1,600,000.00 in trading costs and commissions. FINRA states that Athas churned customer accounts, violating Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, and FINRA Rules 2010, 2020, and 2111.
The complaint also alleges that Athas failed to have an adequate basis for concluding that his trading was appropriate for customers. The stockbroker purportedly did not consider how customers’ accounts would be affected through his frequent trading and margin use. He violated FINRA Rules 2010 and 2111 for this reason.
Athas has been identified in nine customer initiated investment related disputes concerning accusations of his harmful activities when he was employed by securities broker dealers, including Seaboard Securities Inc., Liberty Partners Financial Services LLC, KC Ward Financial, and Worden Capital Management. FINRA Public Disclosure shows that a customer initiated investment related arbitration claim involving Athas’ conduct was settled for $30,000.00 in damages founded on allegations of omissions, misrepresentation, breach of contract, negligence, unsuitable trading, and churning while Athas was registered with Liberty Partners Financial Services.
Another customer initiated investment related arbitration claim concerning Athas’ activities was resolved for $10,000.00 in damages supported by accusations of Athas making excessive trades and churning the customer’s Liberty Partners Financial Services account.
On February 22, 2018, an additional customer initiated investment related arbitration claim regarding Athas’ conduct was settled for $95,000.00 in damages based upon allegations of Athas’ unauthorized and unsuitable trading of stock and over-the-counter equities at KC Ward Financial. FINRA Arbitration No. 17-00213. According to the claim, Athas omitted and misrepresented information relating to transactions executed in the customer’s account. The claim also alleges breach of fiduciary duty, breach of contract, fraud, and violation of Texas State Securities Act.
On May 4, 2020, a different customer filed an investment related arbitration claim involving Athas’ activities in which the customer sought $84,932.35 in damages founded on allegations of negligent supervision and breach of fiduciary duty by Athas between May 2, 2019, and April 23, 2020. According to the claim, the customer sustained damages on unsuitable trading. The claim also contains accusations of breach of fiduciary duty, breach of contract, and fraud.
Athas has a history of association with expelled or otherwise defunct brokerage firms. Athas was associated with Worden Capital Management LLC between July 21, 2016, and August 25, 2020. He was employed by SW Financial between August 24, 2020, and December 22, 2021.
