Donald Fowler Barred Following Allegations of Excessive Trades
Donald Fowler (CRD #: 4989632), a former registered broker with Worden Capital Management LLC and J.D. Nicholas & Associates, Inc., has been barred by FINRA due to alleged churning, a.k.a. excessive trading, according to his BrokerCheck record, accessed on October 20, 2021. Keep reading for more information.
Regulatory Allegations of Excessive Trading
According to an Acceptance, Waiver, and Consent agreement (AWC) dated August 25, 2021, Donald Fowler consented to the findings that between December 2014 and December 2018, while registered with Worden Capital Management, he allegedly churned and excessively traded four customer accounts. Donald Fowler allegedly demonstrated disregard for the customers’ interests and executed excessive trades to maximize his commissions. This allegedly resulted $1,095,000 in investor losses and $949,356 in commissions.
The AWC further states that Donald Fowler allegedly executed short-term in-and-out trades. He also allegedly used margin to increase the buying power in his customers’ accounts. “Trading on margin” means he used money borrowed from his brokerage firm to buy more trades for his clients. This is a high-risk strategy that amplifies the likelihood investors will suffer losses.
You can read a copy of the AWC here.
Which FINRA Rules Did Donald Fowler Allegedly Violate?
FINRA Rule 2020 provides that a member may not “effect any transaction in, or induce the purchase or sale of, any security by any manipulative, deceptive or other fraudulent device or contrivance.”
FINRA Rule 2111 requires financial advisors to have a "reasonable basis" to believe that a recommended transaction or investment strategy is suitable for their client. Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration.
A violation of FINRA Rule 2111 and 2020 also constitutes a violation of FINRA Rule 2010, which requires registered representatives to observe high standards of commercial honor and just and equitable principles of trade.
As part of the terms of the AWC, Donald Fowler consented to an indefinite bar from association with any FINRA member in all capacities.
SEC Regulatory Action
On March 30, 2020, Donald Fowler became the subject of a pending SEC action. The SEC alleged that Donald Fowler recommended unsuitable investments, alleging he “recommended to customers a pattern of high-cost, in-and-out trading without any reasonable basis to believe that the recommendations were suitable for anyone. The Commission's complaint also alleged that he churned customer accounts and made unauthorized trades.
Donald Fowler’s Other Disclosures
Donald Fowler has a substantial history of customer disputes, including the following:
- On August 9, 2021, an investor alleged that Donald Fowler recommended trades that were qualitatively and quantitatively unsuitable. The investor is seeking $1,277,631.00. The case is pending.
- On October 14, 2019, an investor alleged that alleged Donald Fowler engaged in negligence and fraud amongst other allegations. The customer sought $100,000.00; the dispute settled for $120,000.00.
- Two other disputes between 2014 and 2016 alleged that Donald Fowler executed excessive trades. These disputes were collectively resolved for $750,000.
Donald Fowler Background Information
Donald Fowler has passed the following exams:
- Series 63 - Uniform Securities Agent State Law Examination
- SIE - Securities Industry Essentials Examination
- Series 7 - General Securities Representative Examination
- Series 24 - General Securities Principal Examination
He has worked with the following firms:
- Worden Capital Management LLC (CRD#:148366)
- J.D. Nicholas & Associates, INC. (CRD#:44791)
- American Capital Partners, LLC (CRD#:119249)
Kurta Law Can Help
If you suffered losses after working with Donald Fowler, don't hesitate to contact us today at 877-600-0098 or firstname.lastname@example.org for a free consultation.
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