Illinois Advisor Clears Record Of Misleading Termination Allegation

In January 2013, an investment adviser representative (IAR) in Edwardsville, Illinois, faced a misleading Form U5 termination entry on his Central Registration Depository (CRD) and public BrokerCheck® records. Filed by Edward Jones, the entry falsely stated that the IAR was discharged for “providing inaccurate information on a client’s life insurance application” after marking a client as a non-smoker. The disclosure severely harmed the IAR’s professional reputation and employment prospects. Committed to restoring his unblemished record, the IAR engaged HLBS Law to seek expungement of the disclosure through FINRA Dispute Resolution.

Since entering the industry in 2008, the IAR has built a reputation for ethical service and a commitment to client care. In late 2012, he submitted a life insurance application to MetLife, Inc., on behalf of a client. Therein, he marked the client as a non-smoker, based on the client’s very-limited tobacco use (a few cigarettes at a party, months prior) and guidance from another insurer’s interviewer suggesting that a non-smoker rating was possible. To ensure transparency, the IAR emailed MetLife, explaining the client’s situation and the prior insurer’s smoker rating. No policy was issued, and no client harm or complaints arose.

In November 2012, Edward Jones initiated an internal investigation. During intense questioning by a compliance specialist, the IAR, under pressure, answered negatively when asked if he had discussed the client’s tobacco use, despite the fact that he had indeed had that discussion. On January 7, 2013, Edward Jones terminated the IAR, citing allegations of “providing inaccurate information” on the application. On January 23, 2013, the firm filed a Form U5 with this explanation, which was published on the IAR’s CRD and BrokerCheck® records. The misleading entry suggested unethical conduct, causing significant financial hardship and employment challenges for the IAR.

The IAR filed a Statement of Claim with FINRA Dispute Resolution under FINRA Rule 2080, seeking expungement of the Form U5 termination explanation and related disclosures, asserting their defamatory nature and tendency to mislead. Edward Jones filed its Statement of Answer on December 18, 2024, taking no position on the expungement request but denying monetary relief.

The expungement hearing was held via videoconference on May 29, 2025, with Peter Lindholm, Esq., of HLBS Law presenting the IAR’s case through testimony and evidence, including the IAR’s email to MetLife and documentation confirming that no client harm or complaints had transpired. The client did not participate in the hearing, despite proper notification.

The FINRA Arbitrator reviewed the pleadings, testimony, and evidence. He found the Form U5 termination explanation defamatory in nature, as it inaccurately implied that the IAR had engaged in dishonest or unethical conduct. The Arbitrator noted that the IAR’s actions were intended to secure a favorable rate for his client, involved no client harm, and were not investment-related.

On June 5, 2025, the Arbitrator ordered the expungement of the Termination Explanation in Section 3 of the IAR’s Form U5, the “Allegation(s)” response in the Termination DRP, and the “Internal Review” response in the Internal Review from the IAR’s CRD and BrokerCheck® records. These were replaced by stating that “[the IAR] was improperly investigated for an exaggerated claim of having committed fraud. No customers were involved, there were no acts of wrongful taking of property, violation of investment-related statutes, regulations or rules and no SEC or FINRA rules, codes or policies were violated by [the IAR].” 

The Arbitrator’s decision restores the IAR’s unblemished record, enabling him to pursue his career free from the shadow of a misleading 2013 termination disclosure and reaffirming his commitment to ethical service in the financial services industry.

Facing a similar situation? Contact our team today for a complimentary consultation to evaluate your case. Our experts will assess the viability of expungement and guide you through the process.