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Award Date: July 27, 2022
Hearing Site: New York, New York
Respondent Firm: Lincoln Financial Advisors Corporation
Claimant Representative: Doc Kennedy, MBA, J.D.
Case Objective:
A New York advisor with nearly four decades in the financial services industry had a sole customer dispute on his public BrokerCheck record that had been settled for $350,000. He hired AdvisorLaw to seek expungement of the disclosure through FINRA Dispute Resolution.
Case Summary:
In 2002, a 64-year-old woman became a customer of our advisor and his brother. The advisorâs brother was the lead agent on the customerâs account. The customer owned a trust, and unbeknownst to our advisor, his brother was a co-trustee in the customerâs trust. In or around 2019, upon the customerâs death, the other co-trustee discovered that the advisorâs brother had made unauthorized withdrawals from the customerâs trust. The co-trustee then filed for FINRA arbitration, alleging that Claimant and his brother had breached their fiduciary duties in regard to an account for the benefit of the customerâs granddaughter. The co-trustee sought about $1.2 million in damages.
In 2021, the firm settled with the co-trustee for $350,000. While less than the number of damages sought, the settlement was substantial, and the dispute and settlement amount was reported to our advisorâs CRD and public BrokerCheck records.
Result:
During the FINRA arbitration hearing, the Arbitrator reviewed the documents that were submitted and listened to testimony from our advisors and the arguments presented by AdvisorLawâs Dochtor Kennedy, MBA, J.D. The Arbitrator determined that â[i]t was apparentâŚthat [our advisor] was not responsible for the unethical and potentially illegal taking of funds from the Customer, as [he had] had a passive role with the Customerâs account.â
The Arbitrator recommended expungement pursuant to FINRA Rule 2080(b)(1)(B), which sets the standard for expungement in cases where â[t]he registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds.â Thanks to AdvisorLaw, our advisorâs spotless public records will soon be restored.
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