DC Advisor Wins Expungement Of 2017 Termination

Award Date: August 28, 2024
Claimant Representatives: Dochtor Kennedy, J.D., MBA, and Harris Freedman, J.D.
Respondent Firm: McLaughlin Ryder Investments, Inc.

Case Objective:

This current investment adviser representative (IAR) and previous broker, located in Washington, DC, had one disclosure in her 23 years in the industry. The mark was a termination disclosure from early 2017, which alleged that she had misled the firm’s chief compliance officer (CCO) during an internal investigation. She hired AdvisorLaw to clear her records.

Summary:

Our client, who was a broker at the time, joined the firm in early 2010. Seven years later, she was ready to seek new employment, and she began a search. During her time with the firm, she was unaware of any formal internal investigation into her business practices. However, she was notified that her employment was terminated in March of 2017, and she received the disclosure from the firm, which stated that she had misled the firm’s CCO during an internal investigation concerning written correspondence with clients.

Resolution:

Before the expungement hearing, the IAR submitted her statement of claim (SOC) and exhibits. The firm responded, denying the allegations made in the SOC and asserting various affirmative defenses. The firm requested that the SOC be dismissed in its entirety with prejudice, that the IAR’s request for expungement be denied with prejudice, that all claims of recovery be denied, and that all fees and costs be assessed to the IAR.

In the FINRA Dispute Resolution hearing, the FINRA Arbitrator considered the IAR’s statement of claim and the firm’s response. She reviewed the additional evidence and listened to the testimony from the IAR and the arguments on her behalf that were presented by AdvisorLaw’s Dochtor Kennedy, J.D., MBA, and Harris Freedman, J.D. 

Ultimately, the Arbitrator recommended the expungement of the “Reason for Termination and Termination Explanation [from the IAR’s Form U5.]” Further, she directed that the “Reason for Termination shall be changed to ‘Voluntary’ and the Termination Explanation should be deleted in its entirety and shall appear blank” and that “This directive shall apply to all references to the Reason for Termination and Termination Explanation.” 

The Arbitrator went on to “further [recommend] the expungement of all references to [the termination occurrence] from the registration records maintained by the CRD [and that any] ‘Yes’ answers should be changed to ‘No,’ as applicable.” The Arbitrator explained that she recommended expungement “based on the defamatory nature of the information.”

With the help of AdvisorLaw in securing full expungement, this IAR will soon have perfect records once again and be able to move forward without the negative termination allegations on her CRD and BrokerCheck profiles.

If you’re dealing with a meritless, false, or erroneous disclosure on your public record, please contact AdvisorLaw for a complimentary case review today.