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Award Date: June 13, 2025
Claimant Representative: Alex Padla, Esq., HLBS Law
Respondent Firm: Resolute Investment Distributors, Inc.
Key Takeaways:
- A 30-year veteran financial advisor successfully expunged a false 2024 termination disclosure from his FINRA CRD and BrokerCheck records.
- The original disclosure from Resolute Investment Distributors falsely alleged "un-collegial behavior."
- This case showcases AdvisorLaw’s expertise in securing expungements of misleading termination information through in FINRA Dispute Resolution.
Case Objective:
Misleading termination disclosures can severely damage a financial advisor's career. In a significant win, a 30-year industry veteran successfully obtained expungement of a false 2024 termination disclosure from his FINRA CRD and BrokerCheck records. The original entry from Resolute Investment Distributors, which inaccurately cited "un-collegial behavior," was proven misleading, demonstrating the effectiveness of FINRA Dispute Resolution for U5 expungement cases.
Summary:
For over 30 years the FA excelled in the financial services industry with no customer disputes or any other types of disclosures on his public record. From January 2023 to July 2024, he was a registered representative with RID.
On July 18, 2024, the FA’s president instructed the sales team to ask “hard questions” of a partner presenting at a sales meeting, regarding their underperforming exchange-traded funds. Following that directive, the FA questioned the team about their strategy, leading to a professional exchange.
Despite having complied with his president’s instructions, the FA was terminated on July 19, 2024, for alleged “un-collegial behavior” toward the partner team. On July 30, 2024, RID filed a Form U5 stating that the FA was “discharged” due to this behavior.
Resolution:
The FA filed his Statement of Claim with FINRA Dispute Resolution, seeking expungement of the Form U5 entry under FINRA Rule 8312(g)(1), asserting that the termination disclosure was misleading and defamatory in nature. RID did not oppose the expungement request but denied the allegations in its Statement of Answer.
The expungement hearing occurred via videoconference, with Alex Padla, Esq., presenting the FA’s case through testimony and evidence, including details of the president’s directive and the professional nature of the FA’s interaction with the partner team. RID did not contest the evidence presented.
The FINRA Arbitrator reviewed the pleadings, testimony, and evidence. He found the termination disclosure to be misleading and defamatory in nature. In his award, the Arbitrator noted that the FA’s actions had followed his president’s instructions and did not constitute un-collegial behavior warranting termination.
On June 13, 2025, the Arbitrator ordered the expungement of all references to the termination disclosure from the FA’s CRD and BrokerCheck® records, per FINRA Rule 8312(g)(1). The Reason for Termination on the Form U5 was amended to “Voluntary,” and the Termination Explanation was deleted entirely.
This decision restores the FA’s unblemished record, allowing him to continue his career free from the shadow of a misleading 2024 termination disclosure and reaffirming his commitment to ethical service in the financial services industry.
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Facing a similar situation? Contact our team today for a complimentary consultation to evaluate your case. Our experts will assess the viability of expungement and guide you through the process.