- FINRA’s Focus On Minor Infractions: A Threat To Investor Protection?
- When it comes to compliance, don’t be fooled by the AI mirage
- Missouri Advisor Clears Records Of Four Settled Customer Disputes
- Michigan Advisor Restores Flawless Records With Customer Dispute Expungement
- Denver Advisor’s Perfect Record Reinstated With Termination Disclosure Expungement
- Protect Your Brokerage License: Navigating Criminal Disclosures
Award Date: September 26, 2024
Claimant Representative: Alex Padla, J.D., HLBS Law
Respondent Firm: Lincoln Financial Distributors, Inc.
Case Objective:
Halfway through his 28th year in the financial services industry, this Colorado-based advisor was terminated and slapped with a termination disclosure alleging that he violated the firm’s non-cash compensation policy. Hoping to complete his third decade with the perfect record he’d worked so hard to maintain, the advisor sought out HLBS Law to bring him through FINRA Dispute Resolution, in hopes of erasing the disclosure.
Summary:
The advisor joined Lincoln in mid-2011. More than a decade into his career with the firm, in late 2022, he purchased a golf shirt for another advisor at a client entertainment event. The shirt cost approximately $95. The advisor believed the gift had been acceptable under the firm’s policy, which limited the total value of such gifts to less than $100 per year. However, the firm policy for items that did not display the firm’s logo was limited to $75 per year. The advisor received a disciplinary letter from firm compliance for the minor infraction.
The following spring, the advisor purchased two tickets for a baseball game, with the intent of entertaining another financial advisor. But when that advisor canceled, our advisor brought his wife to the game instead. He then erroneously submitted the expense to the firm as reimbursable, rather than as a non-reimbursable, personal expense. Compliance let the advisor know that the event did not qualify for reimbursement, and the advisor paid all of the expenses for the game.
Yet the following month, the advisor was notified that his employment was being terminated for alleged violations of the firm’s non-cash compensation policy.
Resolution:
The FINRA Arbitrator reviewed the documents submitted. She also listened to Alex Padla, J.D. present his arguments on behalf of the advisor and the advisor’s testimony.
After considering all of the testimony and evidence, the Arbitrator recommended the expungement of the “Reason for Termination and Termination Explanation” from the advisor’s Form U5. She further directed that the reason for termination be changed, from “Discharged” to “Voluntary[,]” that “the Termination Explanation should be deleted in its entirety and shall appear blank[,]” and that that directive “shall apply to all references to the Reason for Termination and Termination Explanation.” She recommended the expungement of all references to the corresponding occurrence number from the CRD, as well, as the amendment of any “yes” answers to “no” answers. The Arbitrator’s recommendation was “based on the defamatory nature of the information.”
With Alex Padla, J.D.’s help, the advisor secured a successful expungement recommendation from the FINRA Arbitrator — achieving his goal of being able to enter his 30th year in the industry with a perfect public record.