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Legend Securities Broker Named in FINRA Complaint for Allegations of Fraudulent and Excessive Trading

Hank M. Werner, a Northport, New York-based registered representative formerly employed with Legend Securities, Inc. and Liberty Partners Financial Services, LLC, was named a respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he fraudulently and excessively traded the accounts of his customer, a 77 year old blind and physically disabled widow.

According to the FINRA complaint, while working at Liberty Partners Financial Services and then later at Legend Securities, Mr. Werner serviced and exercised control over all of his customer’s accounts.  Due to his customer’s disabilities, she relied completely upon Mr. Werner for investment recommendations and information on account activity.  However, FINRA’s complaint alleges that Mr. Werner churned and excessively traded the elderly widow’s accounts, allegedly placing over 700 trades and generating approximately $243,430.20 in commissions and fees and approximately $183,734.33 in net losses for his customer.  Further, the complaint alleges that when Mr. Werner changed firms, he increased his markups and commissions on her trades to 3.75-4.25%, an increase of over 40%!

In its complaint, FINRA charges Mr. Werner with violating Section 10(b) of the Exchange Act, Rule 10b-5 and FINRA Rules 2020 and 2010, pertaining to churning and FINRA Rules 2111 and 2010, relating to excessive trading and quantitative suitability.

Stockbrokers, registered representatives, and other financial professionals have been known to engage in many types of fraudulent and prohibited behavior which are in violation of industry rules and procedures.  In order to protect investors from stockbroker misconduct, FINRA rules require broker-dealers to establish and implement a supervisory system in order to safeguard customer assets.  If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be liable to account holders for investment losses.  As a result, account holders who have suffered losses stemming from a registered representative’s excessive trading and churning can file a claim to recover damages against broker-dealers, like Legend Securities and Liberty Partners Financial Services, which have a duty to supervise their employees in order to prevent the above-described misconduct.

Have you suffered losses in your Legend Securities or Liberty Partners Financial Services account due to your stockbroker’s excessive trading, churning or other misconduct?  If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.  Mr. Pearce is accepting clients with valid claims against Legend Securities and/or Liberty Partners Financial Services stockbrokers who may have engaged in misconduct and caused investors losses.

The most important of investors’ rights is the right to be informed!  This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida.  For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues.  The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally!  Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.