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Award Date: May 9, 2024
Claimant Representatives: Dochtor Kennedy, MBA, J.D. and Harris Freedman, J.D.
Respondent Firm: Principal Securities, Inc.
Case Objective:
Approaching his 20th anniversary in the industry, this Minnesota-based advisor had a single customer dispute staining his otherwise spotless records. He hired AdvisorLaw to bring him through FINRA’s Dispute Resolution forum in hopes of achieving expungement of the disclosure.
Summary:
In January 2011, a couple invested in an international fund within an individual retirement account (“IRA”). Due to a misunderstanding on the part of the couple, they lodged a claim with the firm.
The claim was denied, and the customers did not pursue it further, but it remained on the advisor’s records for more than ten years.
Resolution:
Principal Securities, Inc. participated in the advisor’s expungement hearing and did not oppose his request for expungement. The customers did not participate in the hearing. The FINRA Arbitrator reviewed the pleadings and any post-hearing submissions. She also listened to the advisor’s testimony and the arguments presented at the hearing by Dochtor Kennedy, MBA, J.D., and Harris Freedman, J.D.
The Arbitrator determined that the advisor had “complied with the client’s instructions to invest his IRA in an international fund” and that “The client misunderstood the charges and filed the instant complaint on [the advisor’s] BrokerCheck® Report.” She also noted that “The client did in fact receive the discount he had been promised” and that he “remained with [the advisor] for five more years” after lodging the claim.
Due to the reasons that she listed, the Arbitrator determined that the claim was factually impossible, clearly erroneous, or false, and the advisor had not been involved in the alleged sales-practice violation.