According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker William Athas (Athas), previously associated with Sw Financial, has been subject to at least 2 disclosable events. These events include one customer complaint, one regulatory event. Several of those complaints against Athas concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a final customer complaint on January 18, 2022.
Athas was named a respondent in a FINRA complaint alleging that he willfully violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder and violated FINRA Rule 2020 by churning customer accounts. The complaint alleges that Athas controlled the trading in the customer accounts, the volume and frequency of trading in the accounts, decided what securities to buy and sell, the quantity of each transaction, and the timing of each transaction. Athas also determined the commission he would charge for each transaction. The customers routinely followed Athas\\u2019 recommendations. Athas deliberately incurred unreasonably high trading costs in these customers\\u2019 accounts, which made it virtually impossible for the accounts to be profitable. Athas persisted in his trading activity even after being warned about the excessive level of trading and high costs in these customer accounts on several occasions. The complaint also alleges that Athas\\u2019 trading in these accounts was excessive and quantitatively unsuitable for each of the customers based on their investment profiles, as evidenced by the high turnover rates and cost-to-equity ratios, the frequency of the transactions, and the transaction costs incurred. Athas\\u2019 churning and excessive trading caused the customers to pay approximately $1.6 million in commissions and other trading costs and to suffer approximately $1.1 million in losses. Conversely, Athas generated commissions of approximately $1.5 million for himself and his member firms. The complaint further alleges that Athas recommended that the customers engage in short-term, in-and-out trading, often on margin, without having a reasonable basis to recommend that trading strategy to his customers. Athas\\u2019 recommended strategy therefore was not suitable. Athas failed to perform reasonable diligence to understand the cumulative costs of his trading, including commissions, other trading costs, and margin interest. Athas also failed to perform reasonable diligence to understand the impact of these cumulative costs on the value of his customers\\u2019 accounts or the ability of his customers to earn a profit. Athas also failed to understand turnover rates and cost-to-equity ratios, and therefore failed to calculate and consider these metrics when recommending and executing a short-term, in-and-out trading strategy in his customers\\u2019 accounts.
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