Florida Advisor Removes Settled Misrepresentation Dispute

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Award Date: December 10, 2021
Hearing Site: Tampa, Florida
Respondent Firm: J.P. Morgan Securities, LLC
Claimant Representative: Harris Freedman, J.D.

Case Objective:

Three months after departing the firm to join a new one, this advisor was hit with a customer dispute alleging misrepresentation of a variable annuity. That’s when he came to AdvisorLaw to seek expungement through FINRA Arbitration.

Case Summary:

In 2014, the advisor recommended a variable annuity to customers seeking better returns. The annuity was suitable for the customers, and they signed multiple documents attesting to their knowledge of all details of the annuity. Specifically, as was explained in writing, the advisor initially informed the customers and regularly reiterated to them that there were no guarantees of any certain return from the investment. Shortly after the advisor left the firm and ended the five-year advisory relationship, he received a customer dispute alleging misrepresentation.

The customer attended Claimant’s FINRA Dispute Resolution hearing and claimed that he and his wife had been told that they would receive returns of at least 5.5% from the annuity every year. In fact, the annuity offered a 5.5% income benefit upon annuitization of the contract, which was explained to the customers on multiple occasions, as well as in the annuity’s written materials. To make matters worse for the advisor, the customer made additional allegations at the expungement hearing, including breach of fiduciary duty, negligence, breach of contract, fraud, and more.


Upon listening to each party’s testimony and reviewing the documents provided at the FINRA Arbitration hearing, the Arbitrator pointed out that the customers had invested in the variable, fixed, and indexed annuities prior to purchasing the annuity in question through the advisor. The Arbitrator determined that the customers “understood and appreciated the differences among the products, including the well-known fact that a variable annuity varies or fluctuates in value.

Because of the customers’ prior experience with annuities and discussions with the advisor prior to purchase, the multiple signed attestations acknowledging the risks, and the myriad written disclosures received, the Arbitrator concluded that the customers were well aware of the fact that there was no guarantee. Stating that the advisor was “entitled to full expungement” of the complaint, as the allegations were false, the Arbitrator recommended expungement.

The advisor achieved swift removal of the meritless customer dispute from his records.

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Expungement Award