FINRA filed a complaint against former Liberty Partners Financial Services (Bakersfield, CA) and Legend Securities (New York) broker Henry "Hank" Mark Werner alleging securities fraud for churning an account held by a 77-year-old blind widow, claiming he employed excessive and unsuitable trading in the course of a deceptive and fraudulent scheme to net $243,000 in commissions while costing his disabled client in $184,000 in customer losses.
OHO Disciplinary Proceeding #2015048048801
According to the complaint, Werner (CRD #1615495) engaged in a "manipulative, deceptive and fraudulent scheme" and churned each of three accounts held by the elderly customer of his, who happened to be blind, partially deaf, widowed, and in such poor physical health "that she required continuous in-home care, which is something Werner knew."
The findings state that between October 2012 and December 2015, Werner placed over 700 trades in over 200 different securities in this elderly client's account, charging her a markup or commission on every purchase and sale, ranging from 2.50 percent to 4.25 percent by scheme's end, at which time the cost-to-equity ratios for the accounts reached a maximum of 97.73 percent, in what FINRA referred to as a tell-tale sign that the trading in the accounts was excessive.
For instance, Werner purportedly recommended an unsuitable variable annuity (VA) exchange (specifically, the exchange of a Hartford VA for a Nationwide VA), which earned him a commission of more than $10,000 on that transaction alone. FINRA concluded that the VA Werner recommended for exchange "did not provide any benefit to the customer," given its increased fees, expenses, and surrender periods incurred. Documents indicate the older widow's risk tolerance was "moderate."
Werner's BrokerCheck report indicates a lengthy history of disclosures (eight over the past 10 years), multiple terminations, a settled customer dispute, and several instance of cockroaching (jumping from one problem firm to another: In Werner's case, three of his former firms were expelled from the industry, including Brookstone Securities, which itself ran into trouble for fraudulent sales of CMOs to "unsophisticated, elderly and retired investors").
If you have invested with Henry "Hank" Mark Werner or with any other broker or financial advisor whose fraudulent churning or excessive trading in your account, or whose unsuitable recommendations have provided no benefit to you and have actually proven harmful or financially damaging to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.