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Award Date: December 22, 2022
Hearing Site: Washington, D.C.
Respondent Firm: Edward Jones
Claimant Representative: Doc Kennedy, J.D.
Case Objective:
Over a decade into his career, a D.C.-based investment advisor rep had a five-year-old termination disclosure for allegedly failing to comply with firm policies regarding outside business activities (OBAs). Seeking to move forward with a perfect public record, the advisor sought the help of AdvisorLaw to try for expungement through FINRA Dispute Resolution.
Case Summary:
Our advisor joined EJ in the fall of 2011. While he was registered with the firm, he owned an ATM machine business, which was operated separately from his work with the firm. Through his ATM business, the advisor made arrangements with local businesses, such as salons and bars, to have the ATMs installed for public use. He also made an arrangement with the pastor of his church, who was a client of his. The purpose of placing the ATM in the church was to assist parishioners in obtaining cash for tithing.
While the advisor neglected to report the income that he received from his ATM business to the firm, it was in no way related to the firm, and no customer was harmed nor complained with respect to the advisor’s ATM business activity.
In March 2017, the advisor was suddenly notified that his employment with EJ was terminated, effective immediately. EJ then filed a Form U5 amendment reporting that the advisor had been discharged after allegations that he had failed to comply with the firm’s policies and procedures regarding OBAs.
Result:
The FINRA Arbitrator considered the pleadings, testimony, and evidence presented at the expungement hearing, as well as the arguments presented by Dochtor Kennedy, MBA, J.D. The advisor and EJ entered into a stipulation, which dictated that the firm “did not engage in any wrongdoing or defame” the advisor. While EJ claimed that the Form U5 reporting was neither defamatory nor defamatory in nature, the advisor asserted that the language was in fact defamatory in nature and that its impact could mislead the public in a way that causes more harm to him than help to regulators or the public.
The Arbitrator agreed with the advisor’s conclusion, stating that “The facts describe a mistake, yes, but not one against which the public needs protection.” Citing FINRA Rule 1122, which states that information shall not be filed when it “is incomplete or inaccurate so as to be misleading, or which could in any way tend to mislead,” the Arbitrator recommended the expungement of the termination disclosure and Form U5 amendments pertaining to the advisor’s 2017 termination from EJ.
With no other marks on his public records, this advisor will soon have perfect records on the CRD and IARD databases, as well as on BrokerCheck and the IAPD.