FINRA Form U5 Expungement Award:
Termination & Internal Investigation Disclosures Removed
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Award Date: September 24, 2021
Hearing Site: Portland, Oregon
Respondent Firm: Securian Financial Services, Inc.
Claimant Representative: Ben Winograd, J.D. and Zachary Morse, J.D.
A Portland-based advisor with a Form U5 termination disclosure from more than two decades earlier sought FINRA expungement of the mark from his CRD and BrokerCheck records.
Eighteen months into his financial services career, a dually-registered advisor considered moving on from his first broker-dealer and RIA, after the BD firm repeatedly missed payroll. He resigned and joined a new BD. About two months later, due to a dispute between the former BD and RIA involving a canceled contract with a life-insurance company, an investigation was launched over allegations that the advisor’s former supervisor and his employees had improperly shared commissions.
The NASD then investigated the events surrounding the advisor’s departure from the BD and the commission-sharing allegations. Although the NASD found that the advisor had not been involved with any improper commission sharing, and it took no action, the advisor still ended up with internal investigation and termination disclosures on his CRD record.
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The FINRA Arbitrator considered the events and testimony, as presented at the FINRA expungement hearing. He determined that “the allegations have no basis in fact” and “were entirely erroneous and unfounded,” that they were therefore per se defamatory and that they must be removed from the advisor’s records.
The Arbitrator specifically mentioned that “it is undisputed that [the advisor] was not involved with any improper commission sharing during his employment” with the BD and stated that the expungement of the disclosure is a “remedy [which] corrects a grave injustice that occurred as a result of sloppy investigatory processes and a failure to conduct basic due diligence.”
The advisor will now have a pristine BrokerCheck profile and a CRD record free of any disclosures.
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