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November 09, 2017 at 07:38 AM
A Financial Industry Regulatory Authority extended hearing panel barred on Thursday broker Hank Mark Werner of Northport, New York, for fraudulently churning and excessively trading the accounts of his customer — a blind, elderly widow — and for making unsuitable recommendations.
The hearing panel also ordered Werner on Thursday to pay more than $155,000 in restitution to the widow, fined him $80,000 and ordered disgorgement of more than $10,000 representing commissions received for recommending the purchase of an unsuitable variable annuity.
The decision resolves charges brought by FINRA’s enforcement division last August, when FINRA had filed a complaint against Werner for fraud related to churning of the 77-year-old’s account.
Werner had been the elderly widow’s broker — and that of her blind husband until his 2012 death — since 1995.
According to the hearing panel decision, Werner “plundered” his customer’s accounts by engaging “in such an active trading strategy that, when the high commissions he charged were taken into account, it was impossible for [the customer] to make money.”
The panel found Werner frequently bought and sold a security within a week or two, and charged exorbitant commissions even though the blind widow’s financial circumstances required that Werner invest her assets with a minimum amount of risk.
The client was 77 and in ill health when Werner began churning her accounts. Werner engaged in more than 700 trades from October 2012 to December 2015, generating approximately $210,000 in commissions while the customer lost more than $175,000 as a result of his “reckless trading.”
