FINRA U5 Expungement Award:

Advisor Expunges Termination Disclosure From The CRD

 

FINRA U5 Expungement Award:

Advisor Expunges Form U5 Termination Disclosure From The CRD

 

*If you're under FINRA or SEC investigation, or if you have a meritless disclosure on your BrokerCheck, CRD, or IAPD record, call us right now at (303) 952-4025 or click here to talk with an attorney and receive a priority consultation at no charge.


Award Date: March 24, 2021
Hearing Site: Houston, Texas
Respondent Firm: USAA Investment Services Company
Claimant Representative: Dochtor Kennedy, MBA, J.D


Case Objective:

A financial advisor out of Texas had excelled at a firm for nearly ten years. Although he’d received many promotions and was the leader in branch sales revenue, the firm abruptly terminated him for inconsistencies with his timesheet entries. The advisor received a Form U5 termination mark on his CRD record. While the disclosure didn’t appear on BrokerCheck, the meritless mark made it extremely difficult for the advisor to be hired again. So the advisor sought to expunge the Form U5 termination disclosure from the CRD through FINRA’s Dispute Resolution Forum.


Case Summary:

Over several years, the advisor had been well known to arrive late to work or take days off to attend to his disabled wife. Managers would verbally authorize his tardiness, and he attempted to always keep his superiors apprised of his schedule. In 2019, after a new HR manager discovered inconsistent timesheets for two separate days in 2018, the advisor was pulled into a meeting and confronted about his absences.


Do you have a meritless disclosure on your BrokerCheck, IAPD, or CRD record?
Give us a call today at (303) 952-4025 or contact us for a complimentary consultation.


While the advisor noted that he had likely been shuttling his wife to one or more of her many doctor appointments on the days in question, he stated that he would need to review the dates to confirm. Because he could not immediately recall where he had been months earlier on the exact dates in question, the advisor was terminated without hesitation and escorted out of the building.

In this case, the advisor was the victim of a snap decision made by HR that was rash and unwarranted. Even though the disclosure was not reported publicly, AdvisorLaw argued that it was defamatory in nature and was causing real business harm to the advisor.


Result:

When faced with the evidence in this case, the FINRA Arbitrator recommended that the Termination Type be changed to voluntary and that the explanation language included in the disclosure be expunged from the CRD. The Arbitrator’s recommendation of expungement was based upon the defamatory nature of the information contained in the Form U5.

AdvisorLaw often sees cases where one, seemingly-insignificant misstep was blown out of proportion, in order to terminate an advisor with an otherwise-stellar employment history. When an advisor who’s in such a situation receives notification of the Form U5 filing, there is usually little context or depth provided in the allegations, and the implications can be serious.

If you have a Form U5 termination that does not tell the entire story, contact us for a complimentary consultation.




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