FINRA Grants Expungement of Unsuitability Claims for West Virginia Advisor

• Case Outcome: A three-arbitrator FINRA panel unanimously granted the expungement of a customer dispute from a veteran advisor’s record, restoring a 37-year spotless career.
• Legal Finding: The Panel ruled the allegations were "factually impossible or clearly erroneous" and "false" under FINRA Rule 2080.
• Core Issue: A 2022 complaint alleging $750,000 in damages due to "excessive risk" in high-yield bonds was found to be a "market-born fabrication" following unrealized losses.
• Actual Performance: Evidence proved the portfolio actually grew by $1.4M over the client relationship; the firm settled for just $25k to avoid legal costs without the advisor’s consent.
• Final Resolution: The decision mandates the complete removal of the disclosure from the advisor’s CRD and BrokerCheck profiles.

A seasoned financial advisor in Charleston, West Virginia had a 37-year spotless career that was interrupted by one baseless customer complaint. The 2022 dispute, influenced by market dips, had accused him of recommending unsuitable investments in the customers’ thriving portfolio. Backed by HLBS Law, the advisor sought expungement through FINRA arbitration to erase the misleading mark from his record.

The advisor began his exemplary career in March 1988. In early 2011, he onboarded a retired couple—a 67-year-old former contractor and his 61-year-old wife. The customers were experienced in finance, with over 15 years of investment experience, a liquid net worth of $1M–$3M, and a total net worth exceeding $3M. Their goals focused on growth with moderate risk, low liquidity needs, and a 12-plus-year time horizon to benefit their heirs.

In February 2011, the customers transferred assets to RBC, opening eight discretionary accounts for balanced growth. After detailed discussions, the accounts were allocated to stocks and bonds, including high-yield bonds for enhanced returns within their risk tolerance. The customers signed confirmations, received monthly statements, and voiced no concerns. From 2011 to 2022, the portfolio grew by over $1.4M.

Amid 2022’s market turbulence, unrealized losses in the high-yield bonds—highlighted by a new advisor—prompted a November FINRA claim against RBC for excessive risk, seeking $750,000, despite net gains. RBC settled for $25,000 in August 2023 to evade litigation, without the advisor’s involvement. This sole disclosure distorted his CRD and BrokerCheck records, offering no public value. As of the latest BrokerCheck review, it remains his only mark, noted with intent to expunge.

The advisor filed for expungement in November 2024. RBC neutrally responded on January 3, 2025. The customers were properly served, but they did not appear at the expungement hearing. The three-arbitrator Panel held a videoconference hearing on September 25, 2025, in Charleston. Reviewing testimony, 16 exhibits, and settlement terms, they unanimously granted relief under FINRA Rule 2080.

As stated in the award: “The claim, allegation, or information is factually impossible or clearly erroneous[,] and [t]he claim, allegation, or information is false.” Further, “The expungement request is granted as the Customer's allegations were false, clearly erroneous and misleading... The Customer's investments were suitable... The Customer's account was not invested in high-risk securities... value... increased substantially. The only losses... were unrealized... lack of actual damages is reflected by... settlement of only $25,000.00 on his exaggerated claim of $750,000.00.”

The decision mandates removal of all references to the claim from the advisor’s CRD, dispelling a market-born fabrication and restoring his pristine reputation for ethical advisement.

Facing a similar situation? Contact our team today for a complimentary consultation to evaluate your case. Our experts will assess the viability of expungement and guide you through the process.