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In a landmark victory, a California financial advisor has successfully restored his professional reputation by obtaining a FINRA Form U5 expungement on August 15, 2025. This case highlights a critical issue for advisors and firms: the dangers of misleading termination disclosures on a public BrokerCheck profile. Can a BrokerCheck disclosure be removed? The answer is yes, as this case proves.
The advisor, a veteran in the industry, was terminated by HSBC Securities (USA) Inc. in January 2022. The firm's U5 filing marked him as "discharged" for alleged social media communication policy violations. This public disclosure, which damaged his career, was later found to be misleading.
The Case: Unjust Termination for Social Media Use
The advisor had relocated from Hong Kong in 2017, where using apps like WeChat and WhatsApp for client communication was a standard practice. In his role with HSBC USA, he handled banking inquiries but did not transact securities trades. He continued using these apps infrequently for overseas clients, unaware of any policy violation and never discussing trades or instructions.
In 2020, a client complaint led to an internal investigation by HSBC, which found that the advisor had used the apps but had not engaged in any trade-related misconduct. Despite this, he was terminated on January 18, 2022, and the firm filed the damaging Form U5.
Expungement Awarded by FINRA Arbitrator
Assisted by Representative Austin Davis, J.D., of HLBS Law, the advisor filed a claim with FINRA in September 2024. The claim argued that the language in the disclosure was misleading and implied unethical behavior. This was especially relevant as HSBC had faced regulatory penalties for unclear policies on personal devices.
Following a hearing on July 29, 2025, a FINRA Arbitrator found the disclosure to be potentially defamatory and lacking in any regulatory value, as it failed to reflect the true nature of the events.
The arbitrator awarded full expungement:
- Termination Reason: Changed from "Discharged" to "Voluntary."
- Disclosure: The original explanation of the event was deleted.
- Form U5: Question 7F(1) was amended to "No."
- All references to the occurrence were removed, effectively clearing his professional profile of any negative marks.
This case is a critical win for financial advisors seeking to fight back against wrongful termination and defamatory U5 disclosures. It demonstrates that with the right representation, it is possible to reclaim your reputation and undo the long-term damage of an unfair U5 filing.