FINRA Suspends Tim Vorpahl for Alleged Failure to Supervise
Tim Vorpahl (CRD #: 1457312), a broker registered with Vorpahl Wing Securities, has been suspended from FINRA, according to his BrokerCheck record, accessed on May 13, 2022. If you have questions about Tim Vorpahl’s conduct as a broker, read on.
Alleged Failure to Supervise
An Acceptance, Waiver, and Consent (AWC) agreement filed on March 11, 2022, alleges that Tim Vorpahl failed to establish, maintain, and enforce a system of supervision and written supervisory procedures at his firm, Vorpahl Wing. In particular, the AWC alleges that these failures of supervision pertain to suitability and excessive trading.
The alleged misconduct occurred between January 2017 and April 2020. During this period, Tim Vorpahl was Vorpahl Wing’s designated principal responsible for monitoring brokers for unsuitable and excessive trading, including reviewing Monthly Active Account Reports and other reports on trading activity. These Monthly Active Account Reports allegedly contained information such as annualized turnover rates for accounts, commission-to-equity ratios, and other information regarding trades, as well as identifying accounts with high numbers of trades and high commissions.
The AWC alleges that, despite the information included in these reports, Tim Vorpahl failed to establish written policies designed to delineate how Tim Vorpahl and other registered representatives should review customer accounts for signs of unsuitable and excessive trading. According to the AWC, Tim Vorpahl also failed to supervise an unnamed broker formerly registered with his firm by failing to take sufficient action after identifying his excessive trading and unsuitable investment recommendations, information about which appeared in Monthly Active Account Reports.
The accounts in question allegedly had annualized turnover rates from 6.49-6.78 and cost-to-equity ratios of 20.68%-24.46%. For comparison, FINRA considers a turnover rate above 6 and a cost-to-equity ratio above 20% indicative of excessive trading.
The clients allegedly paid $35,223.82 in commissions and other costs due to the former broker’s trading.
The AWC concludes that these alleged actions violated FINRA Rules 3110(a) and (b), and FINRA Rule 2010.
FINRA Rules 3110 and 2010
FINRA Rule 3110 (a) requires firms to establish and maintain systems of supervision to ensure reasonable compliance with FINRA regulations, including the establishment of written procedures. It also requires that all supervisory personnel be properly trained or otherwise experienced in supervisory roles.
Rule 3110 (b) requires that firms create written procedures to define the supervisory process, e.g., defining how a principal will review transactions or internal communications to ensure regulatory compliance.
FINRA Rule 2010 holds brokers to high standards of commercial honor; violations of many FINRA rules qualify as automatic violations of Rule 2010.
FINRA Rule 2111
FINRA Rule 2111 requires that brokers tailor their investment recommendations to suit investors’ profiles. An investor’s profile contains information such as their age, tax status, and risk tolerance.
Investors who rely on broker recommendations may be able to recover their losses through FINRA arbitration.
Tim Vorpahl consented to the following sanctions:
- $7,500 fine
- Three-month suspension from associating with any FINRA member in principal capacities
- 20 hours of continuing education concerning supervisory responsibilities
His suspension began on April 4, 2022, and will end on July 3, 2022.
His firm, Vorpahl Wing, also faced the following sanctions:
- $25,000 fine
- Restitution of $35,223.82, plus interest
- A censure
You can read the full AWC filing here.
Tim Vorpahl has passed the following exams:
- Series 66 – Uniform Combined State Law Examination
- Series 65 – Uniform Investment Adviser Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 53 – Municipal Securities Principal Examination
- Series 28 – Introducing Broker/Dealer Financial Operations Principal Examination
- Series 24 – General Securities Principal Examination
Tim Vorpahl is a registered broker in six states and a registered investment adviser in Washington.
He has also worked for the following firms:
- Vorpahl Wing Securities (CRD#:155989)
- Vorpahl Wing Securities (CRD#:47548)
- Sunpoint Securities (CRD#:25442)
- Murphey Favre (CRD#:599)
- American Express Financial Advisors (CRD#:6363)
Kurta Law Can Help
If you have worked with Tim Vorpahl and have concerns about your investments, don’t hesitate to contact us today at 877-600-0098 or firstname.lastname@example.org for a free consultation.
For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm that exclusively represents investors against brokers and brokerage firms on a contingency basis. The firm only earns a fee if our securities attorneys recover money on your behalf.