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Overview Summary

A FINRA arbitration panel granted expungement to a veteran Michigan financial advisor, successfully clearing a 12-year-old customer dispute from his CRD and BrokerCheck records.

The Allegation: In 2014, former customers filed a dispute against Merrill Lynch alleging unsuitable investment recommendations between 1995 and 2008. The firm settled for $55,000 as a business decision without the advisor's financial contribution or signature.
The Evidence: The advisor proved he recommended a diversified portfolio aligned with the customers' stated 20-year growth and income objectives. The arbitration panel found that account losses were caused by the 2008–2009 macroeconomic collapse and the customers' excessive cash withdrawals, rather than unsuitable advice.
The Ruling: On August 27, 2026, the three-arbitrator panel granted the expungement under FINRA Rule 2080, officially ruling the original allegations were "factually impossible or clearly erroneous" and "false."

Case Objective:

A Michigan financial advisor with more than three decades serving the industry sought FINRA expungement of a customer dispute that had followed him since 2014. The underlying claim accused him of unsuitable recommendations from 1995 to 2008. He pursued arbitration to clear the disclosure from his CRD and BrokerCheck records.

Summary:

The advisor entered the securities industry in August 1994. He spent decades with Merrill Lynch in Michigan and later affiliated with Purshe Kaplan Sterling Investments. Around 1995, he began working with a couple as his customers. At the time, the husband was a Chrysler engineer nearing retirement. The customers reported roughly $100,000 in annual income, approximately $900,000 in liquid net worth, and about $1 million in total net worth. In writing, and on more than one occasion, they confirmed an investment objective of growth and income, a moderate risk tolerance, and a 20-year investment time horizon.

Working from that profile, the advisor recommended a diversified mix of investments, that were primarily equity mutual funds. He explained the terms, risks, fees, and trade-offs of each recommendation. From approximately 1995 through October 2014, the advisor spoke with the customers regularly about the performance of their portfolio. During the 2008–2009 financial crisis, the portfolio declined by more than 20%, and it later recovered. By 2014, the customers were housing and caring for a grandson, and their cash withdrawals for personal needs outpaced the accounts’ remaining balances.

The customers never raised a formal complaint with the advisor before they filed. On October 31, 2014, they commenced FINRA arbitration against Merrill Lynch alone. They alleged unsuitable recommendations from 1995 to 2008 and sought $250,000 in compensatory damages. The advisor was not named in that proceeding. Merrill Lynch settled on August 31, 2015, for $55,000, as a business decision. The advisor neither contributed to the settlement nor signed the agreement, yet the disclosure remained on his registration records for nearly 12 years.

Resolution:

The advisor filed for expungement in October 2025. Merrill Lynch took no position and did not oppose the request. No customer representative appeared at the hearing. The three-arbitrator Panel held a recorded videoconference hearing on August 20, 2026. The advisor appeared through Jennifer Cox, Esq., of HLBS Law. On the strength of his credible testimony, the firm’s answer in the underlying arbitration, and the settlement agreement confirming that he paid nothing toward the resolution, the Panel granted expungement under FINRA Rule 2080.

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The Panel found that “[t]he claim, allegation, or information is factually impossible or clearly erroneous” and that “[t]he claim, allegation, or information is false.” Explaining its decision, the Panel wrote that the advisor had “credibly testified that the Customers’ investments were profitable, but their cash withdrawals for personal needs exceeded their balance,” that he “‘de-risked’ their accounts to avoid the consequences from their extensive spending,” and that “[t]he Customers’ losses were the result of the macroeconomic collapse in 2008 and 2009.”

With the disclosure cleared, the advisor may now move forward free of a mark that never accurately reflected his conduct or the record.

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Expungement Award