Craig Gary Langweiler, of Philadelphia, Pennsylvania, a stockbroker formerly registered with Windsor Street Capital, L.P. (formerly known as Meyers Associates, L.P.), was charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Langweiler effected excessive and unsuitable trades in a customer’s account, and exercised discretion without authorization. Department of Enforcement v. Craig Gary Langweiler, Disc. Proceeding No. 2014040347701 (July 24, 2017).
According to the Complaint, between November 19, 2013, and May 30, 2014, during the time that Langweiler was associated with Meyers Associates, L.P., he traded in customer KK’s investment account two-hundred and fifty-seven times, which caused customer KK’s investment account to suffer losses exceeding twenty-five percent.
Apparently, Langweiler caused the customer’s account to be subject of an annual cost-to-equity ratio of 60.5 percent, and annual turnover of 28.85, evidencing an excessive trading scheme based on the frequency and size of the transactions involved. Additionally, Langweiler reportedly effected $1,292,158.00 in gross purchases in KK’s account, leading Langweiler to accumulate an estimated $27,000.00 in commissions as well as $5,400.00 in administrative costs and trading fees. Langweiler never took a withdrawal during the one-hundred and ninety-three days that Langweiler traded in KK’s account; yet the customer sustained $33,000.00 in investment losses.
FINRA Department of Enforcement alleged that Langweiler’s trading in the customer’s account was unsuitable and excessive considering that Langweiler knew about KK’s high cost-to-equity ratio but persisted in trading to generate commissions. Critically, Langweiler apparently tracked the customer’s cost-to-equity ratio, referring to it as outrageous when questioned by FINRA. The Complaint alleged that Langweiler lacked an adequate foundation to conclude that his investment recommendations were appropriate for customer KK. FINRA Department of Enforcement alleged that Langweiler’s conduct in that regard was violative of FINRA Rule 2010 and 2111.
FINRA also alleged that Langweiler exercised discretion in the customer’s account despite his firm and the customer failing to authorize the activities. Apparently, no authorization from customer KK was provided in writing to the firm approving of Langweiler’s exercise of discretion. Langweiler reportedly failed to discuss trades with customer KK before placing the trades in KK’s account; conduct that FINRA Department of Enforcement alleged to be violative of FINRA Rules 2010 and NASD Rule 2510(b).
FINRA Public Disclosure reveals that Langweiler has been suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon allegations that he failed to provide FINRA staff with information regarding his business activities. Case No. 2017052705901 (Aug. 14, 2017).
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