William Winchester Barred Following Loans From Customers

William Winchester (William Forrest Winchester III CRD# 4404327, aka “Bill Woods”) is a former registered broker and investment advisor whose last employer was Cadaret, Grant & Co., Inc. (CRD# 10641) of Chattanooga, TN. His previous employers include Raymond James Financial Services, Inc. (CRD# 6694), LPL Financial LLC (CRD# 6413), Suntrust Investment Services, Inc. (CRD# 17499) also of Chattanooga. He has been in the industry since 2001.

Raymond James terminated Winchester on 2/20/2020 after the discovery that he had engaged in three “loan arrangements”—two personal and one business. One loan included a promissory note that was related to his role as an executor for the estate of the client’s father. He then went to Cadaret.

Following the termination by Raymond James, on 6/11/2020, the Tennessee Securities Division fined Winchester $45,000 and required him to “Comply with the Tennessee Securities Act of 1980, complete five FINRA training courses, and be on heightened supervision for three years.”

A customer dispute filed on 11/16/2021 alleged that from 03/2009 to 11/2021, Winchester concealed the amount of money that the client’s grandfather deposited in her account. Later, she alleges Winchester borrowed money from the account without her consent. The claim was settled for $160,000.

A second claim filed on the same day alleges that Winchester concealed critical material facts from her regarding a trust that her grandfather set up in her name. She indicated that her grandfather was also a client of Winchester, and that Winchester misrepresented the trust to conceal his own conversion of the account’s funds. In this dispute, the client requested damages of $3,000,000, and the firm settled the claim for $62,500.

Furthermore, on each compliance questionnaire he submitted, Winchester answered “no” to questions regarding loans, and failed to request and obtain written permission to make the loans. LPL had written supervisory procedures prohibiting these types of loans, with limited exception, such as borrowing from an immediate family member. Winchester borrowed $730,000 from two customers and repaid them in full.

When one of Winchester’s customers passed away in late 2009, he agreed to serve as a co-executor for the customer’s estate. He then borrowed money from the estate, and signed a promissory note and established a repayment schedule. However, at the time, Raymond James also had relevant written supervisory procedures prohibiting loans from customers. Winchester was in the process of repaying that loan when he was terminated by Raymond James.

As a co-executor, Winchester received $45,000 in compensation from the late customer’s estate. This was considered an “outside business activity” for which he was required to notify and obtain permission for from his firms, both LPL and Raymond James. Twice Winchester incorrectly reported on Raymond James’ compliance questionnaire that he was not acting as an executor for someone’s estate.

By not notifying his employer firms of these loans, their repayments, and the settlement agreement for one of them, he also committed “settling away,” or settling without the firm’s knowledge.

FINRA sanctioned Winchester with a permanent bar from any FINRA member in any capacity beginning 4/6/2023, after he signed a letter of Acceptance, Waiver & Consent (AWC.) No other sanctions were levied.

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