Arbitration Panel Rewards Expungement of 2 Disputes From 2003

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Award Date: December 7, 2022
Hearing Site: Philadelphia, Pennsylvania
Respondent Firm: Summit Financial Services Group, Inc.
Claimant Representative: Doc Kennedy, J.D.

Case Objective:

A New Jersey Advisor approaching 35 years in the industry had two customer disputes that had plagued his records for nearly two decades. He decided to take the opportunity to clear his records of the disputes through FINRA Dispute Resolution and hired AdvisorLaw to take him through the process.

Case Summary:

The first dispute involved a customer who purchased a variable annuity in 1999 through our advisor. The annuity was suitable for the customer, and the advisor provided all written and oral details and disclosures to the customer prior to her purchase. The customer-funded the annuity in 1999 and 2000. In mid-2000, the advisor transferred firms, and the annuity declined that year due to the dot-com bubble and other market events at that time. The customer ceased to be a client of the advisor upon his firm change. Then, three years later in 2003, the advisor’s records were hit with a customer dispute by the customer, alleging that he had managed her assets unsuitably. The firm denied the claim, and the customer did not pursue it further — but it sat on the advisor’s records for another 19 years.

The second dispute involved a different variable annuity purchased by a different customer. The customer signed disclosure forms affirming her understanding of the fees and terms of the annuity, including the surrender fees and schedule. That customer also purchased her annuity in 1999, and the annuity similarly declined along with the markets in 2000. Upon our advisor’s departure from the firm, the annuity was transferred to another advisor. Our advisor then received a second customer dispute, also in 2003, alleging that the customer was unhappy with the investment’s performance and wanted her money back. The second claim was also denied by the firm, yet it, too, remained on our advisor’s records.


The respondent firm neither submitted a statement of the answer to the advisor’s statement of claim nor did it participate in the hearing. One of the customers was deceased, and the other declined to participate, as well. The three-arbitrator FINRA Dispute Resolution Panel reviewed the advisor’s statement of claim and exhibits, and it heard the customer’s testimony and arguments offered by Doc Kennedy, MBA, J.D.

The Panel recommended the expungement of both disputes, stating its determination that the advisor’s “conduct was in accordance with the standards of FINRA Rule 2111 at all times.” The Panel found that, in each case, “[t]he investment was suitable and consistent with the customer’s investment goals.” It found that “[m]ultiple disclosures were made and acknowledged by the [first] customer,” and that the second customer had “completed and signed all disclosure documents, including three separate documents acknowledging a surrender charge.” For those reasons, the Panel concluded that the claims were clearly erroneous, that the first customer’s “allegation of mismanagement has no merit,” and that “[t]here was no basis for [the second customer] requesting all of her money back.

With the expungement of both customer dispute disclosures on his records completed, this advisor will finally enjoy a record with zero customer disputes — for the first time since 2003.

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Expungement Award