Worden Capital Management LLC Consents to AWC Letter Alleging Failure to Supervise, Resulting in Excessive Trading and Unsuitable Investment Recommendations

Jaimie Worden, founder of Worden Capital, was also named in the letter.

The Sonn Law Group is investigating allegations that Jamie John Worden committed misconduct. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Jamie John Worden (CRD#:4637404) is registered as a broker with Worden Capital Management where he has been employed since February 2009.

Worden has five disclosures on his BrokerCheck report.

December 2020 Regulatory Judgment

• Status: Final
• Initiated By: FINRA
• Allegations: Without admitting or denying the findings, Worden consented to the sanctions and to the entry of findings that he and his member firm failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA’s suitability rule as it pertains to excessive trading. The findings stated that the firm’s WSPs failed to reasonably address how it reviewed for suitability issues in actively traded accounts, including excessive trading. Worden, as the owner, chief executive officer and chief compliance officer (CCO) delegated the supervisory review of a monthly report that flagged customer accounts meeting certain thresholds to a firm principal, but he did not train the principal as to how to review the monthly reports for excessive trading or otherwise check that the principal was conducting a reasonable review. Although Worden had access to the monthly reports and occasionally reviewed the reports, he never acted on the dozens of accounts that routinely were flagged because he believed active trading was suitable for speculative customers. Later, Worden and the firm’s new CCO delegated the review of the monthly report to the branch managers for each firm branch. The system did not improve. The firm did not update its WSPs to reflect this change in supervisory review and the branch managers generally were not trained on how to conduct the reviews and escalate issues. In addition, despite the fact that many of the firm’s representatives recommended the use of margin to their customers and that high interest rates were charged to customers who used margin, the firm’s WSPs failed to address how to supervise margin use. Nor did the firm implement reasonable tools to monitor margin use. Generally, neither the firm nor its supervisors considered the risks of the active trading strategies recommended by the firm’s representatives, particularly the impact of significant costs and margin use on account performance. The firm’s unreasonable supervisory system allowed its registered representatives to make unsuitable recommendations and excessively trade customer accounts causing customers to incur more than $1.2 million in commissions. On the few occasions when branch managers affirmatively identified problematic trading, they would take only limited measures in response. No one at the firm disciplined the representatives, or otherwise increased scrutiny of the representatives’ other customer accounts. Indeed, Worden rejected the CCO’s recommendation that at least four representatives be disciplined for unsuitable recommendations. The findings also stated that the firm and Worden interfered with customer requests to transfer their accounts from the firm to another broker-dealer in connection with the change in employment of 13 registered representatives. Worden caused the firm’s clearing firm to restrict customer accounts associated with the former firm representatives. Although the restrictions were purportedly based on the absence of a photo identification for the customers, that is not a requirement that needs to be met before a firm processes a request to transfer a customer’s account. As a result of these restrictions, the clearing firm rejected requests by customers to transfer accounts from the firm to the broker-dealer and, in some cases, a customer’s request to transfer an account was rejected multiple times. During the delays in processing the customers’ account transfer requests, firm representatives, including Worden, sought to convince customers to keep their accounts with the firm instead of following their representatives to the broker-dealer. The firm ultimately lifted the restrictions and allowed the accounts to be transferred to the broker-dealer.
• Resolution: Acceptance, Waiver & Consent (AWC)
• Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
• Amount: $15,000.00
• Sanctions: Suspension
• Registration Capacities Affected: All Capacities
• Duration: Three months
• Start Date: 2/9/2021
• End Date: 5/8/2021
• Sanctions: Undertaking
• Sanctions: 3 month suspension in any supervisory capacities, to run consecutively and an undertaking to attend and satisfactorily complete 20  hours of continuing education concerning supervisory responsibilities by a provider not unacceptable to FINRA within 90 days.

March 2020 Customer Dispute

• Status: Pending
• Allegations: Failure to Supervise. Dates of activity vary among Claimants, but total date range is June 2015 through December 2019.
• Damage Amount Requested: $1,025,551.00
• Broker Comment: Representative was named in the arbitration by a non-attorney, third-party arbitration cold-calling solicitation company, representing the customer, solely on the basis that they appear on the publicly available Schedule A of Form BD. They had no direct supervisory oversight of the registered representative (also named in the action) nor the client’s account at any time during the duration of the account. A Motion to sever was granted on 11/19/2020 dismissing the claims of 10 of the 11 claimants without prejudice. The final claimant has previously signed a notice dismissing the Firm and all associated persons from the case, but has stated he rescinded the notice shortly after it was made. Mr. Worden has requested expungement of this item from his record due to a number of factual inaccuracies contained in the SOC.

August 2019 Customer Dispute

• Status: Settled
• Allegations: Lack of reasonable supervision
• Damage Amount Requested: $71,014.00
• Settlement Amount: $10,000.00
• Broker Comment: Mr. Worden was named in the arbitration by a non-attorney, third-party arbitration cold-calling solicitation company representing the customer, solely on the basis that he is the owner of the Firm. Mr. Worden had no direct supervisory oversight of the registered representative nor the client’s account at any time during the duration of the account. The matter was settled by the Firm at the behest of another named party who did not want to incur high legal fees to defend the meritless claim. The entirety of the losses in the account came from a single unsolicited stop loss order placed by the client, which was in contravention of the representative’s recommendation to hold the security. If the recommendation had been followed, the client would have realized a significant net profit a few weeks later.

February 2019 Customer Dispute

• Status: Settled
• Allegations: Failure to supervise.
• Damage Amount Requested: $70,766.80
• Settlement Amount: $19,999.00
• Broker Comment: Representative was named in the arbitration by a non-attorney, third-party arbitration cold-calling solicitation company, representing the customer, solely on the basis that they appear on the publicly available Schedule A of Form BD. They had no direct supervisory oversight of the registered representative (also named in the action) nor the client’s account at any time during the duration of the account. Additionally, the non-attorney, third-party was ordered removed from the Matter, as their appearance on behalf of the client was in contravention of FINRA Rules as well as state regulations prohibiting non-attorneys from representing clients in any legal forum, as affirmed by a FINRA arbitrator in another proceeding. Mr. Worden is seeking expungement of this item.

August 2018 Customer Dispute

• Status: Settled
• Allegations: Failure to supervise.
• Damage Amount Requested: $52,783.00
• Settlement Amount: $4,800.00
• Broker Comment: Representative was named in the arbitration by a non-attorney, third-party arbitration cold-calling solicitation company, representing the customer, solely on the basis that they appear on the publicly available Schedule A of Form BD. They had no direct supervisory oversight of the registered representative (also named in the action) nor the client’s account at any time during the duration of the account. 

Contact Us Today

The Sonn Law Group is currently investigating allegations that Jamie Worden committed misconduct. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.