FINRA Expungement Award:

Advisor Back In Action With A Clean Record After Expunging A Termination Disclosure

 

FINRA U5 Expungement Award:

Advisor Back In Action With A Clean Record After Expunging A Form U5 Termination Disclosure

 

*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: August 23, 2021
Hearing Site: Manchester, New Hampshire
Respondent Firm: Fidelity Brokerage Services LLC
Claimant Representative: Dochtor Kennedy, MBA, J.D. and Harris Freedman, J.D.


Case Objective:

A 12-year veteran advisor in Boston spent the past three years unable to secure employment in the financial services industry due to a Form U5 termination disclosure. The firm published allegations that the advisor had been discharged for purportedly being inappropriately paid under the firm’s computer and exercise purchase assistance and reimbursement programs — despite the fact that he had properly adhered to all of the programs’ requirements. The firm has been known to regularly terminate advisors, citing similar allegations.


Case Summary:

While the advisor was registered with the firm, he took advantage of firm-sponsored programs, whereby advisors could be reimbursed for up to 20% of the cost of eligible computer products and exercise equipment. The advisor participated in the program for about seven years, without incident.

Then in 2013, the advisor purchased a laptop and an elliptical machine and sought partial reimbursement through the firm’s programs. He followed all instructions and was reimbursed about $400 by the firm. Upon using the equipment, he realized that it did not meet his needs, and he returned the items. There was no provision of the reimbursement program that required advisors to report returned items.


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About five years later, in 2018, the advisor was approached by the firm’s director of security and compliance manager, who confronted him about the items that had been returned back in 2013. Despite the fact that the advisor had satisfied all of the firm’s program’s written requirements, he was asked to leave the premises.

Fearing the worst, the advisor resigned the following day, and the firm published a Form U5 termination with allegations that the advisor had been inappropriately paid under the reimbursement program. The advisor was then unable to secure registration with other firms due to the disclosure.


Result:

The firm opposed the advisor’s request for expungement and provided substantial exhibits for the Arbitrator to review at the hearing. The documents produced included the original assistance and reimbursement program paperwork, the advisor’s applications and receipts for the items in question, among others.

After thoroughly reviewing the documentation and listening to testimony from the parties, the Arbitrator determined that the allegations were indeed defamatory in nature, and he recommended expungement. The advisor can move on to his next firm with a pristine record.




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