Financial Advisor Demands Expungement of Customer Dispute

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Award Date: March 11th, 2021
Hearing Site: Houston, Texas
Respondent Firm: Cetera Advisors LLC and First Allied Securities, LLC
Claimant Representative: Erika Binnix, J.D. and Dochtor Kennedy, MBA, JD

Case Objective:

A financial advisor out of Texas demanded the expungement of a customer dispute that was showing on his CRD and BrokerCheck records. The customer had alleged misrepresentation of a REIT investment that had suffered losses.

Case Summary:

The investor who made the complaint against the advisor had 30 years of investment experience, a healthy annual income, an investment time horizon greater than ten years, and a penchant for “moderate-to-high” risk in his investments. After a lengthy meeting, the financial advisor in question recommended the NorthStar Healthcare Income REIT. During the same meeting, the financial advisor discussed all risks associated with the investment, including the REIT’s illiquid nature. The advisor and customer mutually agreed to invest 2.5% of the customer’s net worth into the NorthStar REIT.

After suffering a momentary 20% decline in value, the customer alleged mishandling of the investment, as he had not been able to sell the NorthStar REIT on the way down.


Pursuant to FINRA Rule 13805 of the Code of Arbitration Procedure, the Arbitrator found that all claims and allegations made by the investor were false or erroneous, under FINRA Rule 2080.

The arbitration panel opined that the evidence submitted during the arbitration by AdvisorLaw confirmed that the advisor had acted appropriately and professionally in handling the investor’s account. Furthermore, the evidence submitted to the panel, including documents confirming the investor’s signatures on multiple advisements as to the risks and illiquid nature of the investment, confirmed that the allegations were completely without merit.

Erika Binnix, J.D., won an important case for an advisor who now has a spotless record. With decades left in his career, this advisor no longer has to worry about households that he might have lost due to false and very public information.

Contact us to discuss AdvisorLaw’s Disclosure Expungement services. The consultation is complimentary, and our services were created exclusively for financial advisors.

Expungement Award