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Donald Fowler: FINRA, SEC Sanction Worden Rep Over Options Strategy

Former Rockville Center, New York stockbroker Donald Fowler (CRD# 4989632) has been sanctioned by the Financial Industry Regulatory Authority and charged with fraud by the Securities and Exchange Commission. Previously a representative of Worden Capital Management, Mr. Fowler has been barred from acting as a broker.

According to a Letter of Acceptance, Waiver and Consent (No. 2017056432606) issued by FINRA in August 2021, Donald Fowler engaged in churning and excessive trading in four customers accounts’ between 2014 and 2018. The findings describe the effects of his actions in four accounts thusly: In Customer 1’s account, his trading generated $766,256 in total trading costs (including commissions and margin interest), while causing $755,727 in realized losses. In Customer 2’s account, his trading caused $60,824 in total trading costs and $29,736 in realized losses. In Customer 3’s account, his trading activities caused $41,609 in total trading costs and $118,137 in realized losses. And in Customer 4’s account, his trading caused $271,930 in total trading costs and $192,178 in realized losses. 

FINRA’s findings state that Mr. Fowler’s trading in these four clients’ accounts “was excessive and unsuitable,” and that he “effected short-term in-and-out trading with reckless disregard for these four customers’ interests.” In connection with these findings, FINRA barred him from associating with any FINRA member in any capacity.

The AWC Letter also notes that in June 2019, a jury found that Donald Fowler violated sections of the Securities Act and the Securities and Exchange Act of 1934 in connection to allegations that he recommended a “high cost, in-and-out trading strategy without a reasonable basis” to 13 customers and that he executed unauthorized trades. He was subsequently enjoined from further violations by a court order. His BrokerCheck report shows that the SEC charged him in 2017 with violations of securities laws, ordering him to pay $132,085.20 in disgorgement. 

Donald Fowler’s BrokerCheck report also describes several customer complaints against him. Twelve have reached settlements while two are still pending. A pending customer complaint filed in August 2021, for instance, alleges churning, unsuitable investment recommendations, breach of fiduciary duty, and negligent misrepresentations and omissions; it alleges damages of $1,277,631. A complaint filed in October 2019 alleged he breached his fiduciary duty, committed fraud, breached contract, and violated Georgia securities laws, eventually reaching a settlement of $120,000. A similar complaint filed in 2016 alleged churning, unauthorized trading, breach of fiduciary duty, and common law fraud, ultimately resolving with a settlement of $400,000.

According to the Financial Industry Regulatory Authority, Donald Fowler holds 13 years of securities industry experience. His previous registrations include Worden Capital Management (Rockville Center, New York; 2014-2019), JD Nicholas & Associates (Syosset, New York; 2007-2014), and American Capital Partners (Wantagh, New York 2005-2007). His credentials include four securities industry qualifying examinations: the Uniform Securities Agent State Law Examination, or Series 63; the Securities Industry Essentials Examination, or SIE; the General Securities Representative Examination, or Series 7; and the General Securities Principal Examination, or Series 24. He presently holds no state licenses. (Information accessed on January 2, 2021.)

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