FINRA Expungement Award:

Advisor Expunges Three Customer Disputes, Clearing His Record

 

FINRA Expungement Award:

Advisor Achieves Expungement Of Two, Nearly $1 Million-Settled Customer Disputes

 

Award Date: October 19, 2021
Hearing Site: Montpelier, Vermont
Respondent Firm: UBS Financial Services Inc.
Claimant Representative: Dochtor Kennedy, MBA, J.D., and Harris Freedman, J.D.


Case Objective:

For nearly a decade, an advisor had two customer disputes tainting his otherwise-pristine BrokerCheck profile and CRD report. Lodged two months apart, both disputes pertained to customers who owned the same, highly-concentrated stock and who disregarded the advisor’s recommendations to diversify. Both claims were settled — each for around $1 million. Because the advisor wanted to free his public records of the meritless disclosures, he hired AdvisorLaw.


Case Summary:

Two customers of the firm, neither of whom worked with the advisor, had concentrated positions in a certain stock. Despite being advised to diversify, neither customer was willing to liquidate —yet both wanted to receive income from their holdings. Both customers chose to employ options as a strategy for maintaining their positions while also receiving income.

The advisor explained the risks, with which both customers were familiar, and the customers proceeded with the strategy. When the stock price subsequently rose sharply, the customers missed out on gains and complained.


Result:

The Arbitrator determined that both claims originated from “the same set of operative facts.” The advisor had not been the broker of record, nor had he provided either customer with investment advice, and he therefore could not have been involved with any alleged sales-practice violation. The advisor had had no role in the implementation of the disputed strategy, nor had he been a supervisor at the time. The Arbitrator recommended expungement in the “interests of consumer protection and awareness.”

Now the advisor can move forward with a public record that truly reflects his nearly four decades of integrity in the financial industry.


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