Two Advisors Seek Combined Expungement of Customer Complaint

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Award Date: February 3, 2021
Hearing Site: Chicago, Illinois
Respondent Firm: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Claimant Representative: Harris Freedman, J.D. and Dochtor Kennedy, MBA, JD

Case Objective:

Two financial advisors who were hit with the same customer complaint sought expungement of their shared settlement disclosure from their Central Registration Depository (CRD) and BrokerCheck records.

Case Summary:

The first financial advisor was asked by his customer to amend the subscription agreement for an alternative investment. The customer was a surgeon who was going into surgery, and the amendment needed to be made immediately, as the initial opportunity to invest was closing that same day. The customer verbally authorized the advisor to amend the subscription agreement on his behalf. Later, after suffering losses, the same customer alleged that the investment was unsuitable and that he had never authorized the amendment.

The second advisor had no involvement with the customer or the complaint, and he was only named because he was the first advisor’s partner.


After considering the pleadings, the Arbitrator found that the first financial advisor had properly recommended the investment, in light of the customer’s financial strength. The Arbitrator also found that no forgery had occurred, as the amendment had been verbally authorized by the customer. The Arbitrator concluded that the allegations against the first advisor were indeed false and should be removed from the CRD.

The Arbitrator made an affirmative finding of the fact that the second advisor had not been involved with the alleged, investment-related, sales-practice violation and should therefore have his disclosure expunged, according to FINRA Rule 2080.

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Expungement Award