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William Athas Barred by FINRA

May 2, 2022 Excessive Trading

William Athas (CRD #: 3165470), has been barred by FINRA, according to his BrokerCheck record, accessed on April 21, 2022. If you have questions about William Athas’s conduct as a broker, read on.

Bar by FINRA

In a regulatory action filed on January 18, 2022, William Athas was barred by FINRA following allegations of excessive trading in clients’ accounts during the period between December 2014 and April 2020. These allegations also involve K.C. Ward Financial and Worden Capital Management, which employed William Athas during this period.

FINRA filings allege William Athas conducted excessive trading in nine accounts owned by seven clients for the purpose of generating commissions. William Athas allegedly conducted short-term equities trades, some of which used margin, and earned 2-3% commission on both purchases and sales of these securities.

These trades allegedly resulted in cost-to-equity ratios ranging from 56% to 246% and turnover rates of approximately 17 to 75, with stocks being held for 20 days on average. For comparison, FINRA defines a cost-to-equity ratio of 20% or more and a turnover rate higher than six as excessive trading.

Finally, filings allege that William Athas’ clients paid $1.6 million in commissions and trading costs as well as $1.1 million in losses on these trades, while William Athas and his firms received $1.5 million in commissions.

FINRA alleges that, through these actions, William Athas willfully violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, as well as FINRA Rules 2111, 2020, and 2010.

FINRA Rule 2111

FINRA Rule 2111 requires brokers to take into account investors’ profiles when making investment recommendations. Investors’ profiles contain information such as their age, tax status, and risk tolerance.

Recommending investments or trades that do not suit a client’s profile, or which could not reasonably be suitable for any investor, are both violations of this rule.

FINRA Rules 2020 and 2010

Manipulative, deceptive, or otherwise unethical behavior violates FINRA Rule 2020, which bans this behavior in relation to influencing the purchase and sale of securities.

FINRA Rule 2010 requires brokers to maintain high standards of commercial honor and ethical conduct. Brokers may face automatic violations of Rule 2010 by violating other rules.

What is margin trading?

Margin trading derives from margin investing, which involves borrowing money from a brokerage to increase the size of one’s investment. However, the increased potential for returns comes with increased risk. You must also maintain a minimum value in your margin account no matter how your investments play out.

Sanctions

Following this action, William Athas was permanently barred by FINRA.

You can read the initial complaint here and the full Order Accepting Offer of Settlement here.

Investor Disputes

There are two disputes—one from 2020 and one from 2017—that alleged William Athas recommended excessive trades. 

The disputes collectively settled for $179,932.35. 

Background Information

William Athas has passed the following exams:

  • Series 63 - Uniform Securities Agent State Law Examination
  • SIE - Securities Industry Essentials Examination
  • Series 7 - General Securities Representative Examination

Prior to being barred, he worked for the following firms:

  • SW Financial (CRD#:145012)
  • Worden Capital Management (CRD#:148366)
  • K.C. Ward Financial (CRD#:145135)
  • Securities America (CRD#:10205)
  • Dalton Strategic Investment Services (CRD#:23485)
  • CBG Financial Group (CRD#:6578)
  • Aegis Capital (CRD#:15007)
  • Avalon Partners (CRD#:41357)
  • Liberty Partners Financial Services (CRD#:130390)
  • J.W. Cole Financial (CRD#:124583)
  • J.P. Turner & Company(CRD#:43177)
  • Emmett A Larkin Company (CRD#:6625)
  • Seaboard Securities (CRD#:755)

Kurta Law Can Help

If you worked with William Athas and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.