FINRA Panel Grants Expungement Of Trade Delay Allegation For Virginia Advisor

• Case Outcome: A Virginia-based advisor successfully expunged a "trade delay" dispute from 2019 after a FINRA panel ruled it "factually impossible or clearly erroneous."
• The Cause: The delay was caused by NYLife Securities LLC failing to communicate that the advisor’s promotion to a managerial role had stripped him of his trading authority.
• Advisor Advocacy: In a significant display of ethics, the advisor proactively sought technical assistance to help the client and ultimately advised the client to file a complaint against the firm to recover losses.
• Panel Findings: The three-arbitrator panel noted the advisor acted in the customer’s best interest and was hindered solely by the respondent firm’s lack of timely communication regarding its own policies.

A Virginia-based financial advisor with over a decade of impeccable service was hit with a solitary, unjustified customer dispute arising from firm procedural oversights. The 2019 complaint wrongly implicated him in delayed trade executions. With AdvisorLaw's advocacy, the advisor sought expungement through FINRA arbitration to eradicate the misleading mark from his professional record. 

The advisor began his financial services career in September 2013. In 2014, he acquired a client who was a 43-year-old systems integration advisor earning $120,000 annually. The client had a $350,000 liquid net worth, $400,000 total net worth, no dependents, and a growth-oriented profile featuring conservative-to-moderate risk tolerance and a 20-plus-year horizon. She required $30,000 in liquidity and sought professional financial guidance amid her demanding schedule. 

Tailoring recommendations to her needs, the advisor proposed a diversified portfolio, including a variable annuity with protective riders. The client reviewed the annuity’s prospectus, grasped all terms, risks, fees, and benefits, and signed disclosures affirming her understanding. From 2014 to 2019, the advisor spoke regularly with the client regarding her portfolio. No trades were made until 2018's market turbulence prompted her request to liquidate to cash. 

By 2015, the advisor had advanced to a managerial role, prohibiting client trading—a policy the firm failed to clearly communicate or enforce through reassignment. The advisor worked to obtain trading authority to help the client, and he was eventually able to execute the trades she had requested. However, the interim delay caused by the firm’s lapses resulted in losses for the client. The advisor urged her to complain against the firm, which settled for $12,278.83 in January 2019, without his involvement or contribution. This lone disclosure tainted his otherwise pristine CRD and BrokerCheck records, while offering no genuine investor protection. 

Expungement proceedings began in May 2025. The firm responded neutrally in July. The client, properly notified, did not participate. The three-Arbitrator Panel convened via videoconference in January 2026, in Washington, D.C. Assessing pleadings, the advisor's testimony, expert input, settlement terms, and exhibits, the panel unanimously granted relief under FINRA Rule 2080. As stated in the award: “The claim, allegation, or information is factually impossible or clearly erroneous.” Further, “The Panel finds that [the advisor] was unaware that in his role as a partner that he would not be allowed to make any trade and sought authority and then technical assistance. He was not informed in a timely manner that such would be of no use. Once he became aware of his restricted role, he informed the Customer and suggested a complaint be filed by her, knowing that it was possible that it would be reflected on his record. The complaint was accurate, but it did not mention Claimant. It was a complaint against Respondent. Respondent settled the complaint without the participation of Claimant. The claim here is deemed impossible or clearly erroneous as to Claimant, as under the circumstances he acted in the Customer's interest as best he could but could not prevent the alleged damage due to Respondent's policies, of which he was not fully aware, despite his efforts to seek assistance.” 

The Panel’s expungement directive mandates the removal of all references to the occurrence, thereby affirming the advisor's diligence and integrity.