FINRA Form U5 Expungement Award:
Denver Advisor Clears Records Of Termination Disclosure
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Award Date: March 2, 2023
Hearing Site: Denver, Colorado
Respondent Firm: Fidelity Brokerage Services LLC
Claimant Representative: Harris Freedman, J.D.
A previously-registered broker and current investment advisor in Denver had been in the industry since 2012. She had a perfect BrokerCheck record, aside from a 2017 Form U5 termination disclosure stating that she had been discharged following allegations that she had copied a client’s signature from one form to another when processing a form for the client. Seeking to restore her perfect record, the advisor hired HLBS Law to represent her in FINRA Arbitration.
In 2012, the advisor joined Fidelity as a financial representative at the company’s call center in Texas. In 2013, 2014, and 2015, the advisor received promotions, which ultimately landed her as Branch Relationship Manager at Fidelity’s Denver, Colorado branch.
In November of 2016, the advisor met with the president of a casino that was Fidelity’s longtime client. The casino had about 60 employees enrolled in its simple IRA plan with another firm, and the casino wanted to transfer the plan to Fidelity, due to the high fees that they were paying with its current custodian. In order to avoid incurring fees for the following quarter, the casino wanted to make the transfer prior to January 1st of 2017.
Our advisor and her team worked with Fidelity’s operations support group and the casino’s human resources department. The casino president’s signature was required in order to effectuate the transfer. As of late December, the casino president had signed all of the documents necessary to transfer the IRA plan to Fidelity.
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Upon the advisor delivering the documents to Fidelity, the operations department sent the advisor an additional form that the casino president was required to sign, as well. However, by that time, the casino president was away on winter vacation, and she would not be returning in time to sign the form prior to January 1st. The casino stressed to our advisor the importance of completing the transfer before that time.
The advisor contacted the casino president on her vacation and consulted with a senior financial advisor with Fidelity regarding the manner. All parties agreed to photocopy the casino president’s signature onto the form from another document on a preliminary basis, until the casino president could visit the office and resign the form in person. The signature was photocopied onto the form, and the casino president did visit the office and sign the form herself upon her return.
However, when our advisor’s manager learned that the signature had been photocopied, he told her that she would be receiving a written warning. Instead, on January 5, 2017, the advisor’s manager notified her that she was being terminated immediately, due to a failure to follow firm policy.
Prior to the advisor’s hearing, Fidelity filed a statement of answer in response to our advisor’s statement of claim for a FINRA Dispute Resolution hearing. Fidelity denied all allegations against it and filed a motion to dismiss. However, Harris Freedman, J.D., argued that that there were indeed facts and legal grounds to move forward, and the motion to dismiss was denied.
At the hearing, the Arbitrator considered the pleadings, the advisor’s testimony, and the evidence. She also listened to the facts, as illustrated by Harris Freedman, J.D.
Determining that the information on our advisor’s Form U5 was defamatory in nature, the Arbitrator recommended the expungement of the disclosure. She recommended that the Reason for Termination and Termination Explanation be expunged from the CRD, that the Reason Form Termination be changed to “Voluntary,” and that the Termination Explanation appear blank on all of the advisor’s records.
With the expungement of this sole disclosure, our advisor will soon be able to continue her career with perfect public BrokerCheck and CRD records.
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