FINRA Expungement Award:
Advisor’s Four Decades-Old FINRA Disclosures Expunged
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Award Date: March 23, 2022
Hearing Site: Philadelphia, Pennsylvania
Respondent Firm: UBS Financial Services Inc.
Claimant Representative: Dochtor Kennedy, MBA, J.D.
A New Jersey advisor approaching 40 years in the industry had four disclosures on his public records. Seeking to clean up his image after spending about half of his career with the marks, the advisor hired AdvisorLaw to bring him through FINRA’s expungement process.
All four of the disclosures that our advisor sought to expunge stemmed from issues with the stock of a savings and loan association that existed and thrived for more than 40 years before its stock took a steep dive in 1990. It was discovered that the savings and loan had been releasing fraudulent financials. It failed and was seized. All shareholder equity was lost, resulting in three class-action lawsuits, one of which was settled for more than $1.5 million.
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Prior to its monumental decline in 1990, the stock was highly-favorable and rated as a “buy” by various, prominent Wall Street firms. Our advisor and his family owned the stock personally, and our advisor recommended it to customers when it was suitable for them. Our advisor had no way of knowing that the savings and loan had begun to release false financial reports, and the stock’s decline and subsequent class-action suits came as a surprise to our advisor, as well as other investors.
The four customer disputes were lodged between 1990 and 2003, and three of the four were settled.
After listening to testimony by the advisor and arguments by Dochtor Kennedy, MBA, J.D. the FINRA Arbitrator pointed out that the events could not have been foreseen by the advisor and that the savings and loan had even misled the firm, itself. While the Arbitrator noted that the customers’ investments had been unsolicited, he also mentioned that even had the advisor solicited the investments, “the purchases met the Customers’ investor profiles and objectives.” As the claims were lodged so far in the past, none of the settlement agreements could be produced. Typically, the absence of a settlement agreement can hinder an advisor’s chances in an expungement proceeding. Yet AdvisorLaw was able to overcome that obstacle, and the Arbitrator recommended the expungement of all four of the disclosures from the advisor’s records.
After 20 years with a spotty public record, our advisor will soon have records that are unblemished by the actions of fraudulent individuals, decades in the past.
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