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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.
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 on the defamatory nature of the information contained in 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 the 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.
Contact us to discuss AdvisorLaw’s Disclosure Expungement services, or fill out the form below for a complimentary consultation.
- Juris Doctorate from the University of Denver Sturm College of Law
- Master of Business Administration (MBA) with a major in Finance from the Keller Graduate School of Management
- Bachelor of Science in Business Administration (BBA from the University of Minnesota)
- Former FINRA licenses Series 7, 63, and 55 and former L&H license
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