FINRA U5 Expungement Award:

Arizona Advisor And Wholesaler Wins Expungement Of Duplicate Termination Disclosures

 

FINRA U5 Expungement Award:

Arizona Advisor And Wholesaler Wins Expungement Of Duplicate U5 Termination Disclosures

 

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Award Date: December 12, 2021
Hearing Site: Hartford, Connecticut
Respondent Firm: Prudential Annuities Distributors, Inc.
Claimant Representative: Dochtor Kennedy, MBA, J.D.


Case Objective:

An advisor based in Arizona sought expungement of a FINRA Form U5 termination disclosure alleging that he had been permitted to resign after an investigation by the firm concluded that he had submitted sign-in sheets containing non-genuine signatures of third parties. The disclosure, which was dated 2019, was listed on the advisor’s public records twice, due to a duplicate filing.


Case Summary:

Our advisor joined the firm in late 2015 as a wholesale distributor of annuity products. In that role, he was required to conduct product training for financial advisors. The advisors receiving the training were required to complete sign-in sheets, which our advisor was responsible for submitting, to formally and legally acknowledge the financial advisors’ attendance at the training sessions. Due to the sensitive information included on the sheets, our advisor did not keep copies of them, and he hand-delivered the sheets to the firm.

Often, the sign-in sheets were misplaced by the firm, and our advisor was later asked to re-generate the sheets with back-dated information. When our advisor wasn’t able to obtain a newly-signed sheet from the relevant advisor in time to avoid an order cancellation, he would obtain their authorization to complete a new sheet on the financial advisor’s behalf. At no time did our advisor submit a sign-in sheet without the appropriate advisor’s authorization, nor did he ever submit a sheet for training that had not occurred.



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In late June of 2019, the firm initiated an investigation into our advisor’s handling of the sign-in sheets. He did his best to identify any of the duplicate sheets in question and seek signatures from the appropriate advisors, attesting to their attendance at the training sessions. Around the same time, our advisor reported an employee of the firm for disseminating misinformation. Due to the issues that arose surrounding the investigation and backlash from reporting the employee, our advisor chose to resign. About a month later, he was hit with two identical termination disclosures on his public records.


Result:

The FINRA Arbitrator listened to testimony, as well as arguments presented by Dochtor Kennedy, J.D., MBA and he reviewed the documents that were presented at the hearing. Determining that the disclosure met FINRA’s standards for expungement, the Arbitrator issued an award recommending expungement of both disclosures from our advisor’s records and expungement or amendment of the questions on the FINRA Form U5 and CRD pertaining to the disclosures. Our advisor may now continue his 16-plus-year career without the hinderance of duplicate termination disclosures on his public records.




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