A jury in Manhattan federal court ruled in favor of the Securities and Exchange Commission in a trial against a broker charged with defrauding customers by churning their accounts in order to make hefty commissions. The agency said the commissions generated by Donald J. Fowler were so high that clients would have needed a 142% return to break even.
The SEC charged Fowler and his partner, Gregory T. Dean, in January 2017 with fraud for the trading scheme. At the time of the misconduct, the brokers were registered with J.D. Nicholas & Associates, a defunct broker/dealer in Syosset, N.Y.
Dean, who has 15 disclosures on his Form CRD, settled with the SEC, and admitted he “knowingly or recklessly made trade recommendations to his customers with no reasonable basis, and that his conduct violated the federal securities laws.” He’ll pay over $550,000 in disgorgement, interest and civil penalties.
Fowler was found liable on all counts, including violations of the antifraud provisions of federal securities laws. Remedies against him will be determined at a later date, the SEC said.
The two men are currently registered with Worden Capital Management, a broker/dealer in Rockville Centre, N.Y.