FINRA Awards Expungement Of Misleading Termination For Florida FA

• Case Outcome: A Florida-based financial advisor successfully won a FINRA arbitration to expunge a defamatory Form U5 disclosure filed by J.P. Morgan Securities, LLC.
• Arbitrator’s Finding: The Arbitrator ruled the disclosure was "defamatory in nature" and ordered the removal of all references to the allegations from the advisor's CRD record.
• The Allegation: The firm claimed the advisor provided improper NAV pricing on mutual fund purchases for employee-related accounts, characterizing his exit as an "employment separation after allegations."
• Key Evidence: Documentation proved the trades were vetted and approved by compliance at the time, resulting in zero commission for the advisor, and caused no customer harm.
• Regulatory Violation: J.P. Morgan filed the damaging disclosure 1,191 days after the advisor’s resignation, far exceeding FINRA’s 30-day reporting mandate.
• Professional Impact: This victory erases the only blemish on a 15-year impeccable career, allowing the advisor to move forward at Merrill Lynch without the burden of a misleading record.

A committed financial advisor in Parkland, Florida with a career spanning over 15 years faced an unwarranted blemish on his otherwise-impeccable record, due to a delayed and distortive Form U5 filing. The 2020 disclosure stemmed from an internal review of mutual fund purchases and inaccurately portrayed his voluntary resignation as tied to alleged policy violations. Supported by HLBS Law, the advisor pursued FINRA arbitration to expunge the defamatory entry and reclaim his professional integrity.

The advisor launched his distinguished career in June 2010 and joined J.P. Morgan in October 2012, registering in Florida until his departure in October 2016.

In 2013, he established an account for his father, coded as employee-related, per firm policy. The account was vetted and approved by both compliance and management. His father acquired mutual funds from PIMCO at net asset value (NAV), which yielded no commissions for the advisor.

Similarly, in April 2016, the advisor assisted a bank employee’s brother in opening an IRA and rolling over $29,000 from a prior 401(k). The 401(k) account was also employee-related. The rollover involved purchases of J.P. Morgan and Franklin Templeton funds at NAV, again reviewed and sanctioned by oversight teams without compensation to the advisor.

In September 2016, when the advisor’s exploration of new career opportunities was discovered by management, his supervisor challenged the NAV pricing, citing prospectus restrictions for non-immediate family. Though the clients offered to rectify the trades, management declined, leading the advisor to resign on October 18, 2016.

Astonishingly, over three years later and 1,191 days beyond FINRA’s 30-day mandate, on February 21, 2020, J.P. Morgan filed a Form U5 labeling the advisor’s exit as an “employment separation after allegations” and claiming that he had “mistakenly” provided NAV pricing contrary to prospectus, despite the fact that there had been no customer complaints or harm.

This sole mark has impeded the advisor’s career, causing financial hardship and barriers to new employment and clientele at his current firm, Merrill Lynch, in Fort Lauderdale.