According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Steven Woods (Woods) has been subject to at least two customer complaints during his career. Woods is currently employed by Worden Capital Management LLC (Worden Capital) and was formerly registered with Laidlaw & Company (UK) Ltd. (Laidlaw). The majority of the customer complaints against Woods concern allegations of high frequency trading activity also referred to as churning.
In November 2018 a customer complained that Woods violated the securities laws by alleging that the financial advisor engaged in unauthorized trading, misrepresentation, and unsuitability in 2016 causing $41,607 in damages. The claim is currently pending.
In May 2018 a customer complained that Woods violated the securities laws by alleging that the financial advisor engaged in churning, unauthorized trading, and unsuitability from 2015 through 2017 causing $157,588 in damages. The claim is currently pending.
When brokers engage in excessive trading, sometimes referred to as churning, the broker will typical trade in and out of securities, sometimes even the same stock, many times over a short period of time. Often times the account will completely “turnover” every month with different securities. This type of investment trading activity in the client’s account serves no reasonable purpose for the investor and is engaged in only to profit the broker through the generation of commissions created by the trades. Churning is considered a species of securities fraud. The elements of the claim are excessive transactions of securities, broker control over the account, and intent to defraud the investor by obtaining unlawful commissions. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has show a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Woods entered the securities industry in 2009. From October 2012 through December 2013 Woods was associated with Meyers Associates, L.P – brokerage firm that was expelled from the industry for multiple regulatory compmlaints and unethical dealings. From December 2013 until July 2017 Woods was registered with Laidlaw. Since July 2017 Woods has been registered with Worden Capital out of the firm’s New York, New York office location.
At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to excessive trading and churning violations. Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.