Former Massachusetts Broker Named Respondent in SEC Order for Allegedly Misappropriating $97,000 from One Investment Advisory Client over Several YearsTuesday, March 24, 2020
On March 10, 2020, the Securities and Exchange Commission (SEC) released an Order Instituting Administrative Proceedings and Notice of Hearing against Bruce Worthington, a resident of Tewksbury, Massachusetts.
Worthington was most recently a registered representative and investment adviser representative of Founders Financial Services, LLC (FFS) in Middleton, Massachusetts. According to his FINRA BrokerCheck report, Worthington was associated with FFS from June 2013 to September 2018 when the firm terminated Worthington after concerns arose about his receipt and disposition of customer funds prior to his association with FFS. Just prior to working at FFS, Worthington was associated with Commonwealth Financial Network in Rowley, Massachusetts from February 1999 to May 2013.
On February 21, 2019, the Enforcement Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth of Massachusetts filed an Administrative Complaint against Worthington regarding allegations connected to his termination with FFS. The Complaint alleged that around September 2006 through April 2018, Worthington misappropriated the investment funds of at least one Massachusetts investor for his own personal use. According to the Complaint, this investor had little investment experience and heavily relied on Worthington to make good investment decisions in his IRA and brokerage accounts. Between September 2006 and November 2008, Worthington withdrew just over $97,000 from the investor’s advisory account. The SEC asserts that many of these funds were used for Worthington’s personal use.
Further, Worthington convinced his client to diversify his investments in alternative investment outside of his advisory account and misled the investor for years in order to perpetuate the scheme. The Complaint alleges that Worthington created documents with fictitious fixed income investment portfolios in 2008 and 2009 to convince his client that his funds had been invested in the portfolios. The SEC alleges that up until 2013, Worthington had frequent communication with this client in order to give him false information about his investments. Communication between Worthington and this client ceased for about four years until April 2017 when the client met with Worthington who informed him that he had switched advisory firms. After the client made numerous attempts to inquire about withdrawing funds, Worthington fabricated a document that showed a value of approximately $140,000 but stated that he was having trouble obtaining the investor’s funds. Though the client has made many attempts to contact Worthington, the client has been unable to get a response from Worthington since April 18, 2018.
When Worthington failed to answer the Complaint, the Enforcement Section filed a Motion for Default on March 22, 2019. Now, by way of the Final Order, the Commonwealth of Massachusetts issued a permanent cease-and-desist order against Worthington and permanently barred him from associating or registering in Massachusetts as a broker-dealer or an investment adviser. The Final Order also required accounting of all losses attributed to the alleged misconduct and disgorgement of all profits.
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