Exploring William Worthen King: Unveiling the Complaints

William Worthen King‘s career as a financial advisor has been marred by a series of troubling complaints from investors, casting a shadow over his long-standing position at Merrill Lynch, one of the world’s most prestigious financial firms. As Gertrude Stein once said, “Everybody gets so much information all day long that they lose their common sense.” This quote seems particularly apt when examining the allegations against King, where investors claim to have lost significant sums due to his actions.

The Rise and Fall of William Worthen King

William King, also known as Bill King, built a career spanning several decades in the financial industry. He established himself as a broker at Merrill Lynch, handling substantial client portfolios and building a reputation in the field. However, recent events have led to a dramatic fall from grace, a stark reminder of the importance of due diligence and ethical conduct in financial advising.

Nature of the Complaints

Let’s examine the nature of these complaints more closely to understand their implications for investors and the broader financial industry:

1. Unsuitable Investments: One of the primary allegations against King involves recommending unsuitable investments to his clients. This is a serious breach of financial advisory standards, as every investment recommendation should be tailored to the client’s financial situation, risk tolerance, and investment objectives. The suitability rule is a cornerstone of ethical financial advising, and violations can lead to significant losses for investors.
2. Unauthorized Trading: Another grave accusation is that of unauthorized trading, particularly in options. This involves executing trades in a client’s account without their explicit permission. Such actions not only violate industry regulations but also breach the fundamental trust between advisor and client. Unauthorized trading can expose clients to unexpected risks and potential losses.
3. Misuse of Discretionary Authority: Some complaints suggest King may have misused his discretionary authority. While discretionary accounts allow advisors to make trades without consulting the client for each transaction, this authority must be used judiciously and always in the client’s best interest. Misuse can lead to portfolio imbalances and unnecessary risk exposure.
4. Over-concentration in Risky Securities: There are also allegations of over-concentration in risky securities, particularly in over-the-counter (OTC) stocks and options. This strategy can expose clients to undue risk and potentially significant losses, especially if it doesn’t align with their risk tolerance or investment goals.
5. Failure to Act in Clients’ Best Interests: A particularly concerning complaint, filed in August 2022, alleges that King failed to act in his client’s best interests when enrolling their brokerage accounts into a managed strategy. The clients claim he did not implement proper risk management strategies, leaving their portfolios vulnerable to market volatility. This complaint alone alleges $600,000 in damages.
6. Misrepresentations: Earlier complaints against King include allegations of misrepresentation. For instance:
   • A June 2002 complaint claimed misleading statements were made regarding a variable annuity purchase.
   • A March 1999 complaint alleged false statements about fees and performance in Merrill Lynch consults accounts.
7. Excessive Tax Loss Harvesting: The March 1999 complaint also alleged that King conducted tax loss sales in excess of what was authorized. This highlights the importance of clear communication and adherence to client instructions in all aspects of portfolio management.

The Financial Impact

While the full extent of investor losses is not publicly known; the complaints paint a picture of potentially widespread financial damage:

• The $600,000 in alleged damages from a single complaint in 2022
• Multiple pending complaints with unspecified damages
• Earlier settlements and complaints suggest a long-standing pattern of issues

It’s worth noting that bad financial advisors can cost investors an average of 3.4% per year in returns. Over time, this can amount to hundreds of thousands or even millions in lost growth potential, significantly impacting retirement plans and long-term financial goals.

Regulatory Actions and Current StatusAccording to FINRA BrokerCheck, King had 28 customer complaints as of March 2024. This high number of complaints is a red flag for potential systemic issues in his advisory practices.

King resigned from Merrill Lynch on April 21, 2023, following allegations of unsuitable and unauthorized trading in client accounts. This resignation came amid mounting complaints and likely internal investigations by Merrill Lynch.

Lessons for Investors

The allegations against William Worthen King serve as a stark reminder of the importance of vigilance when working with financial advisors. Here are some key takeaways for investors:

1. Regular Account Reviews: Investors should regularly review their accounts, questioning any unusual activity or unexpected losses.
2. Understanding Investments: Ensure you fully understand each investment in your portfolio and how it aligns with your financial goals and risk tolerance.
3. Clear Communication: Maintain open lines of communication with your advisor, and don’t hesitate to ask questions or voice concerns.
4. Second Opinions: If something doesn’t feel right or you’re unsure about a recommendation, seek a second opinion from another financial professional.
5. Background Checks: Regularly check your advisor’s background using resources like FINRA BrokerCheck to stay informed about any complaints or regulatory actions.
6. Risk Management: Ensure your portfolio has proper risk management strategies in place, especially if enrolled in managed accounts.
7. Written Authorization: Be clear about the level of discretion you’re granting your advisor and get all authorizations in writing.

Moving Forward

For those who believe they may have been affected by King’s actions, it’s crucial to seek professional advice. This may include consulting with a financial attorney or reaching out to regulatory bodies for guidance. For the most up-to-date information on his professional history and any regulatory actions, check King’s FINRA CRD #1432593.

Remember, your financial future is too important to leave in the hands of someone who may not have your best interests at heart. Stay informed, ask questions, and don’t hesitate to seek a second opinion if something doesn’t feel right. The case of William Worthen King serves as a cautionary tale in the financial industry, highlighting the need for constant vigilance and the importance of choosing trustworthy, ethical advisors to manage your investments.