The law offices of Gana Weinstein LLP are currently investigating claims that Broker William Winchester (Winchester) has been accused by investors of engaging in fraudulent misappropriation of their funds. According to records kept by The Financial Industry Regulatory Authority (FINRA), it appears that Winchester was employed by Cadaret, Grant & Co., INC. at the time of the activity. If you have been a victim of Winchester’s alleged misconduct our firm may be able to assist you in recovering funds.
FINRA BrokerCheck shows a final customer complaint on April 06, 2023.
Without admitting or denying the findings, Winchester consented to the sanction and to the entry of findings that he borrowed more than $850,000 from his customers without notifying the member firm with which he was associated or obtaining the firm’s prior written approval. The findings stated that Winchester never disclosed to his firm that he had borrowed money from his customers. Winchester also falsely answered ‘no’ on annual questionnaires that asked, among other things, whether he had borrowed money from any customer. In addition, after one of Winchester’s customers passed away, he agreed to serve as a co-executor of the customer’s estate. While registered with FINRA, Winchester borrowed money from the estate. Winchester signed a promissory note to the beneficiary of the estate, who was also his customer, to establish repayment terms for the funds he had borrowed from the estate. At the time Winchester entered into this promissory note, the firm prohibited its registered representatives from borrowing from customers. At the time Winchester was terminated from the firm, he was in the process of repaying the beneficiary the amounts borrowed pursuant to the terms of an agreement. The findings also stated that Winchester engaged in an undisclosed outside business activity (OBA). Winchester received $45,000 in compensation for his services as co-executor of his customer’s estate. Winchester did not disclose to the firm his appointment as co-executor of his customer’s estate, and also failed to disclose that he was serving as co-executor of his customer’s estate when he associated with another firm. Winchester twice falsely represented on the firm’s compliance questionnaires that he was not, among other things, acting as an executor of any individual’s estate. The findings also included that Winchester entered into settlement agreements with customers without notifying the firm. Winchester did not disclose the promissory note that he signed to the beneficiary of his deceased customer’s estate to the firm and also did not disclose a settlement agreement with one of his customers relating to $380,000 he had borrowed from the customer.
Our law firm has extensive experience representing defrauded victims when their advisors accept loans from clients or conduct securities sales through OBAs. The practice of selling unapproved investments, promoting fraudulent schemes to hide misused funds, and engaging in other deceptive acts is known in the industry as “selling away,” a major infraction of securities laws. The industry defines “selling away” as a practice where a financial advisor offers investments in securities, companies, or promissory notes that have not been authorized by their brokerage firm. While a few of these investments might be valid, many end up as Ponzi schemes or involve advisors illegally converting client funds.
However, federal securities laws and the FINRA rules require firms to monitor and supervise its employees in order to detect and prevent brokers from offering investments in this fashion. To ensure proper supervision of brokers, firms must establish procedures for monitoring advisors’ actions and engagements with the public. Selling away misconduct often occurs where brokerage firms either fail to put in place a reasonable supervisory system or fail to actually implement that system. Supervisory failures allow brokers to engage in unsupervised misconduct that can include all manner improper conduct including selling away.
In cases of selling away the investor is unaware that the advisor’s investments are improper. In many of these cases the investor will not learn that the broker’s activities were wrongful until after the investment scheme is publicized, the broker is fired or charged by law enforcement, or stops returning client calls altogether.
Winchester has been in the securities industry for more than 18 years. Winchester has been registered as a Broker with Cadaret, Grant & Co., INC. since 2020.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.