Windsor Street Stockbroker Suspended For Suitability
Craig Cary Langweiler, of Philadelphia, Pennsylvania, a stockbroker associated with Windsor Street Capital, L.P. (formerly Meyers Associates, L.P.), has been fined $15,000.00 and suspended for one year from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Office of Hearing Officers Default Decision pertaining to findings that Langweiler effected unsuitable, excessive and unauthorized trades in customer accounts. Department of Enforcement v. Craig Gary Langweiler, No. 2014040347701 (Dec. 8, 2017).
Langweiler was subject of a FINRA Complaint on July 14, 2017, alleging that Langweiler’s conduct was violative of FINRA Rules 2010, 2111 and NASD Rule 2510(b). Langweiler reportedly failed to answer the Complaint, causing FINRA’s Office of Hearing Officers to find him in default.
According to the Decision, between November 19, 2013 and May 30, 2014, Langweiler executed excessive trades in customer KK’s account on an unsuitable basis, and exercised discretion in the customer’s account without approval. Evidently, the supervisory procedures that Langweiler was governed by stated that discretionary accounts were not accepted by the firm and stockbrokers were disallowed from exercising price and time discretion as well as other types of discretion in the accounts of customers.
The AWC stated that no written approval was ever requested by Langweiler from KK or the firm to enable him to trade in KK’s account on a discretionary basis. Despite this lack of approval, Langweiler still executed two-hundred and fifty-seven trades in KK’s account before ever having discussed the trades with KK or procuring his consent. FINRA’s Office of Hearing Officers concluded that Langweiler’s conduct in that regard was violative of FINRA Rule 2010 as well as NASD Rule 2510(b).
The Decision further stated that between November 19, 2013 and May 30, 2014, investment decisions were made by Langweiler in KK’s account, where Langweiler determined the price and quantities of securities to trade as well as the timing of each trade. Over a one-hundred and ninety-three-day period, two-hundred and fifty-seven trades had been effected in the customer’s account. KK reportedly made no withdrawals during this period, and maintained a $76,773.02 balance on a monthly basis.
The Decision stated that KK’s account was subject of a 28.85 turnover rate – four times the turnover rate threshold for excessive trading. The Office of Hearing Officers also noted that Langweiler’s improper conduct in KK’s account led Langweiler to accumulate substantial gains at KK’s expense. Particularly, Langweiler accumulated commissions totaling $27,000.00 even though customer KK paid administrative fees, costs and commissions totaling $32,500.00 and sustained $33,000.00 in losses.
The Decision stated that Langweiler was cognizant that his trading exceeded the returns in KK’s account. Consequently, FINRA concluded that Langweiler lacked an adequate basis to conclude that the volume of transactions he recommended was appropriate for KK. FINRA’s Office of Hearing Officers found that Langweiler’s conduct was violative of FINRA Rules 2010 and 2111.
FINRA’s Office of Hearing Officers noted several aggravating factors in Langweiler’s case. Particularly, this is not the first, second or third time that he has been sanctioned for improper conduct. Langweiler has been fined $20,000.00 and suspended for two years by FINRA in all capacities according to an Office of Hearing Officers Decision containing findings that while he was associated with Meyers Associates, L.P., Summit Brokerage Services, Inc., and Saxony Securities, Inc., he failed to make disclosures of judgments and liens, and lied about those judgments and liens when questioned by his firm and FINRA; conduct violative of FINRA Rules 2010, 1122, NASD Rule 2110, NASD IM-1000-1 and FINRA By-Laws Article V, Section 2(c). Department of Enforcement v. Craig Gary Langweiler, No. 2011029549201 (Dec. 15, 2015).
Additionally, he has been fined $7,500.00 and suspended from associating with any FINRA member in any capacity based upon consenting to findings that while registered with Saxony Securities, Inc., he traded in a customer’s account without the customer’s written authorization or the firm’s approval during a period that discretionary trading was prohibited; his discretionary trading was violative of NASD Rules 2510 and 2110. Letter of Acceptance, Waiver and Consent, No. 2008015073801 (Sept. 20, 2010). Moreover, he was fined $5,000.00 and suspended by FINRA for entering into unauthorized loan arrangements with customers while registered with American Portfolio Financial Services; conduct violative of NASD Rules 2110 and 2370. Letter of Acceptance, Waiver and Consent, No. 2007010515001 (Aug. 25, 2008).
FINRA Public Disclosure confirms that Langweiler has been identified in thirteen customer initiated investment related disputes. Specifically, a customer initiated investment related arbitration claim involving Langweiler’s conduct was settled for $17,000.00 in damages founded on accusations that Langweiler made unsuitable investment recommendations to the customer, and failed to appropriately diversify the customer’s investment portfolio. NASD Arbitration No. 03-00061 (Aug. 18, 2004). Then, a customer initiated investment related arbitration claim regarding Langweiler’s activities was resolved to settle allegations of non-disclosure of investment information, breach of fiduciary duty, and the recommendation of an over-the-counter equity that became worthless after the customer purchased it. NASD Case No. 04-07160 (Sept. 5, 2005).
Subsequently, a customer initiated investment related arbitration claim pertaining to Langweiler’s conduct was settled for $49,500.00 in damages based upon accusations of suitability and excessive equity trading. National Association of Securities Dealers (NASD) Arbitration No. 07-00887 (Apr. 24, 2008). Thereafter, a customer initiated investment related arbitration claim regarding Langweiler’s activities was resolved for $32,500.00 in damages supported by allegations of unauthorized trading of highly risky options and over-the-counter equities. FINRA Arbitration No. 09-02501 (Aug. 16, 2010).
Another customer initiated investment related arbitration claim involving Langweiler’s conduct was settled for $112,750.00 in damages founded on accusations of suitability, excessive trading, and the unauthorized exercise of discretion to effect stock transactions in the customer’s account. FINRA Arbitration No. 11-03089 (Sept. 13, 2002). Further, a customer initiated investment related arbitration claim regarding Langweiler’s activities was resolved for $140,000.00 in damages based upon allegations that Langweiler utilized the customer’s margin in an excessive manner, traded without the customer’s consent, accumulated excessive commissions, and churned the customer’s investment portfolio of equities and corporate debt investments. FINRA Arbitration No. 14-01038 (Nov. 4, 2014).
Langweiler’s registration with Windsor Street Capital, LP has been terminated as of March 24, 2017.
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