Financial Advisor Granted Expungement Of Sole Disclosure

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Award Date: December 28, 2021
Hearing Site: New York, New York
Respondent Firm: WMA Securities, Inc.
Claimant Representative: Dochtor Kennedy, MBA, J.D.

Case Objective:

A Georgia-based financial advisor spent more than 20 of his 23-plus years in the industry with an erroneous customer dispute on his records. Seeking to remove the disclosure at last, the advisor took advantage of AdvisorLaw’s FINRA Disclosure Expungement services.

Case Summary:

In 2000, a young woman and her parents went to our advisor seeking growth with a high-risk tolerance, no liquidity needs, and an investment time horizon of more than 20 years. Our advisor performed a financial analysis of the customers’ investments and made suitable investment recommendations, which included a variable universal life (VUL) policy for each of them. The recommended VUL provided insurance protection and unique growth opportunities with tax advantages.

It was thoroughly explained to the customers, and they were provided with the prospectus, as well. The customers completed and signed several documents in which they affirmed their understanding of the VUL’s surrender charges, the fact that it was a life insurance policy, and the fact that it provided the opportunity for growth.

The customers each purchased the VUL policy in February of 2000. In March of 2001, our advisor learned that the customers had requested that a different insurance company replace their VUL policies with its own life insurance. Our advisor met with the customers and was told that they no longer wanted insurance protection or long-term investment plans. The advisor reiterated the surrender charges to the customers, and the customers asked whether the cash value from one of their VULs could be moved to another.

The advisor was able to get the insurance company to agree to do so and informed the customers, but the customers never completed the process of combining their contracts and allowed all three policies to lapse. The customers then lodged a claim with the firm, alleging that they were not informed of the VUL’s surrender charges nor that there was life insurance associated with their VUL policies. The claim’s status appeared as pending on the advisor’s records for the next two decades.


FINRA Dispute Resolution’s arbitrator read the documents presented at the hearing, reviewed the exhibits, and listened to testimony from our advisor. Arguments from Dochtor Kennedy, J.D., MBA clarified why the customer dispute met FINRA’s Rule 2080 standards. The Arbitrator determined that the advisor’s testimony was credible.

She found that the customers had been “properly informed of the nature of the product they were purchasing” and that “their claim one year later of deception and non-disclosure of relevant information was false.”

The FINRA Arbitrator recommended the expungement of the disclosure from the advisor’s records, and the advisor will soon have a squeaky-clean public profile.

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Expungement Award