FINRA Form U5 Expungement Award:

Advisor Receives U5 Termination Disclosure Due to COVID-19

FINRA Form U5 Expungement Award:

Advisor Receives U5 Termination Disclosure Due to COVID-19

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Expungement Award Date: June 7, 2021
FINRA Hearing Site: Dallas, Texas
FINRA Respondent Firm: Transamerica Capital, Inc.
FINRA Claimant Representative: Erika Binnix, J.D. & Dochtor Kennedy, MBA, JD

Case Objective:

A near-25-year financial services veteran from Texas sought expungement of a Form U5 termination disclosure that arose as a result of the global Covid-19 pandemic. Effects of the pandemic that were out of the advisor’s control had prevented him from meeting the position’s requirements, which had been put in place prior to the COVID outbreak.

The advisor was terminated only six months into his tenure with the firm.

Case Summary:

In January of 2020, the advisor was hired by the firm to acquire new business in a newly-acquired territory. The firm told the advisor that he was hired primarily because of his existing relationships in the area. In order to ensure that the advisor was able to attend the following week’s national sales meeting, the firm reduced the advisor’s training from its usual five-day program to a three-day program. As a result, the advisor was insufficiently trained in the firm’s CRM software.

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Beginning in mid-March of 2020, the Covid-19 pandemic and non-essential business shutdowns began to take effect. As a result, the advisor was unable to meet with his prospects in person. The volatile markets consumed the time and energy of those in the industry and made it difficult for the advisor to get time on the phone with his prospects. Many began to complain about the multiple voicemails and emails that they received on a daily basis from wholesalers such as our advisor.

While the advisor fulfilled his daily contact obligations, his abbreviated training in the firm’s CRM software resulted in erroneous entries that inaccurately reduced his production ranking among colleagues. Despite the fact that the firm was well aware of the unrealistic nature of its expectation that its reps meet their pre-covid production requirements, the firm was unsympathetic, and it terminated the advisor.


After considering the testimony and evidence submitted in the arbitration, the FINRA Arbitrator recommended that the Reason for Termination on the advisor's Form U5 be changed to “Voluntary” and that the Termination Explanation be deleted in its entirety. The Arbitrator based the decision on the defamatory nature of the information contained in the disclosure.

The advisor can now move forward without the blemish of a termination disclosure on his CRD and BrokerCheck records.

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Expungement Award