FINRA Expungement Award:
Advisor Successfully Expunges 8 Customer Dispute Disclosures
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Expungement Award Date: January 29th, 2021
FINRA Hearing Site: New York, New York
FINRA Respondent Firm: Redacted
FINRA Claimant Representative: Harris Freedman, Esq. and Dochtor Kennedy, MBA, JD; AdvisorLaw, LLC
A registered CEO and CCO (Chief Compliance Officer) in the New York area sought expungement of eight separate customer dispute disclosures from his BrokerCheck profile and the CRD.
While our client was CCO, a rogue advisor who was registered with the firm covertly concocted a Ponzi scheme. The rogue advisor created a sham RIA, induced firm clients to invest though it, and stole money from several of the broker-dealer’s customers. He concealed his actions from the broker-dealer and supervisors by not registering the sham company and using communication methods that were unaffiliated with the firm.
All eight of the customers named the firm as a party in the complaints, because the rogue advisor in question (and his accomplice) were currently under criminal prosecution and had no appreciable assets.
After considering the pleadings, pursuant to Rule 13805 of the Code of Arbitration Procedure, the Arbitrator found that all claims, allegations, or information contained in the disclosures were factually impossible or clearly erroneous. Because the CCO was not involved with the alleged investment-related, sales-practice violation, forgery, theft, misappropriation, or conversion of funds, the allegations against him were false.
All eight disclosures are to be expunged from BrokerCheck and the CRD.
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