FINRA Expungement Award:

Advisor Expunges A 2020 Form U5 Termination Disclosure — Restores Perfect Records

 

FINRA Form U5 Expungement Award:

Advisor Expunges A 2020 Form U5 Termination Disclosure — Restores Perfect Records

 

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Award Date: March 18, 2022
Hearing Site: Los Angeles, California
Respondent Firm: Berthel Fisher & Company Financial Services, Inc.
Claimant Representative: Zack Morse, J.D.


Case Objective:

After nearly 15 years with the firm, this advisor was terminated in November of 2020. The firm filed a Form U5 that resulted in allegations being published to BrokerCheck, stating that the advisor had impersonated a client via telephone. Seeking to relieve herself of the damaging disclosure and restore her perfect public record, the advisor hired AdvisorLaw to seek expungement through FINRA arbitration.


Case Summary:

In the summer of 2020, a longtime client of our advisor’s advisory team passed away. That client’s wife, who was 82 years of age at the time, reached out to our advisor for help with her finances. The client felt comfortable with our advisor, as they had known each other for many years. The client sought help with annuities that she had purchased with a previous advisor, over a decade earlier. Our advisor contacted the annuity company on behalf of the client. However, the previous advisor was still listed on record with the annuity company, and the company would not provide any information to our advisor regarding the client’s annuities.

Because the client was under severe emotional stress and had a significant speech impediment, she did not wish to contact the annuity company herself. The client asked our advisor to contact the company and represent herself as the client, in order to access the information she needed. In her best effort to help the client, our advisor obliged and was able to obtain the necessary information.



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Two weeks later, a compliance analyst from the annuity company sent a letter to our advisor’s team, requesting information about calls that the company had received in reference to the client’s annuities. The advisory team replied with an explanation, and the client wrote a letter explaining the situation, as well. The company replied and stated that it would not be taking any action. However, a member of the advisory team then heard that our advisor’s employment was to be terminated by the firm. The advisory team member wrote a letter to firm compliance on the advisor’s behalf.

About three months later, in early November of 2020, the advisor informed the firm of her intent to resign the following day. Yet on the following day, the firm informed the advisor that her employment was being terminated. It then filed a Form U5 stating that the advisor had been discharged for allegedly impersonating a client via telephone.


Result:

At the FINRA Dispute Resolution hearing on the matter, the Arbitrator listened to testimony from our advisor and arguments from Zack Morse, J.D. He reviewed the letters written by the client, the annuity company, and the advisory team member, as well as the firm’s internal communications regarding the matter and our advisor’s records.

After assessing the events that had transpired, the Arbitrator determined that the allegations on our advisor’s records were of a “defamatory nature” and recommended expungement. Soon, our advisor will be back to having disclosure-free CRD and BrokerCheck records.




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