FINRA Fines and Suspends Former CEO of Wentworth Management Services
Ryan A. Morfin, the former CEO of Wentworth Management Services, a broker-dealer aggregator whose subsidiaries include Purshe Kaplan Sterling Investments and Cabot Lodge Securities, accepted a five-month suspension and a $10,000 fine from the Financial Industry Regulatory Authority (FINRA).
Morfin served as Wentworth’s CEO from 2016 until January 2022, when he stepped down voluntarily, according to a FINRA letter of acceptance, waiver and consent. Additionally, the letter stated that, from at least January 2021 to January 2022, Morfin allegedly violated FINRA Rules 1210 and 2010 by engaging in banking activities and by acting as a general securities principal without properly registering with FINRA. Morfin accepted the penalty without accepting or denying the charges.
FINRA Rule 1210 requires individuals at a member firm who engage in investment banking or securities business to be licensed before advising in regards to securities offerings, as further specified in FINRA Rule 1220, which defines investment banking representatives and general securities principals. A violation of FINRA Rule 1210 also constitutes a violation of FINRA Rule 2010, which requires members “to observe high standards of commercial honor and just and equitable principles of trade.”
The FINRA letter claims that Morfin participated in two security offerings during his work at the Wentworth subsidiary, Cabot Lodge, during the time period in question, without registering with FINRA or passing the examination related to the investment banking representative registration category. Morfin allegedly advised as to the structure and facilitation of due diligence on one offering and assisted with the marketing of the second.
Similarly, Morfin acted as a principal for Purshe Kaplan during the same time frame, again without properly registering. At Purshe Kaplan, Morfin engaged in the hiring and attempted firing of employees, set employment terms, and directed wire transfers. He also allegedly “expensed hundreds of thousands of dollars of business expenses to Purshe Kaplan at his own discretion.”
The imposed sanctions will be effective on a date set by FINRA.
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