Securities Lawyers Blog
The attorneys at Gana Weinstein LLP are investigating BrokerCheck records reports that broker William Nicholas Athas (Athas), currently employed by SW Financial has been subject to at least nine customer complaints during the course of his career. According to records kept by The Financial Industry Regulatory Authority (FINRA), Athas’s customer complaints alleges that Athas recommended unsuitable investments in various investments among other allegations of misconduct relating to the handling of their accounts.
In January 2022, FINRA barred Athas finding that Athas 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.
In May 2020, a customer complained that Athas violated the securities laws by alleging that Athas engaged in unsuitable trading, common law fraud, churning. The claim alleges $84,932.35 in damages and is currently pending.
In January 2017, a customer complained that Athas violated the securities laws by alleging that Athas engaged in misrepresentations, breach of fiduciary duty, breach of contract, negligence, unauthorized trading, and violations of Texas State Securities Act. The damage amount requested was $290,000. The claim settled in the amount of $95,000.
In July 2011, a customer complained that Athas violated the securities laws by alleging that Athas engaged in churning and excessive trading. The damage amount requested was $100,000. The claim settled in the amount of $10,000.
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 shown 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.
Athas entered the securities industry in 1999. Since August 2020, Athas has been associated with SW Financial out of the firm’s Melville, New York office location.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.