New York Advisor Wins Expungement Of 2020 Customer Dispute

This New York-based financial professional began her career in 2012 and maintained a spotless record until a false customer complaint surfaced in 2020. After years of the unwarranted mark tarnishing her Central Registration Depository (CRD) and BrokerCheck® records, the advisor turned to HLBS Law to pursue expungement through FINRA Dispute Resolution, seeking to clear her name and restore her reputation.

The advisor met a customer in June 2017 after the customer attended a social security seminar. The customer was a project manager with over 20 years of investing experience. She sought the advisor’s advice for reallocating her underperforming 401(k), which was valued at $350,000. With a net worth of $780,000 and a moderate risk tolerance, the Customer opted for a brokerage account over an annuity, favoring a “bucket” approach to her investments. The advisor reviewed the customer’s 401(k), which included company stock, mutual funds, and a $60,000 2005 Target Date Fund. The advisor explicitly advised the customer against moving her company stock, explaining the tax advantages of keeping it in the 401(k) and recommended consulting a tax professional. In a recorded call with the advisor, her manager, and the 401(k) provider, the customer authorized a $60,000 rollover of the Target Date Fund to an IRA, leaving the stock untouched.

The advisor continued advising the customer until early 2019, when the customer transferred her assets to her husband’s advisor. At that point, the company stock remained in the 401(k). Later, the new advisor moved the stock, triggering a significant tax bill. On January 2, 2020, the customer filed a complaint against the advisor, falsely alleging that the advisor had failed to warn her of tax consequences during the 2017 rollover. Pruco Securities investigated and denied the claim on January 24, 2020, but the complaint lingered on the advisor’s record, damaging her professional standing.

A three-arbitrator FINRA arbitration panel reviewed the advisor’s statement of claim, Pruco’s statement of answer, and all submitted evidence. On March 26, 2025, during a recorded videoconference hearing in Syracuse, New York, the Panel heard testimony from the advisor and arguments from Chelsea Bauer, Esq. of HLBS Law. Pruco did not oppose the expungement, and the customer did not participate. The Panel found the customer’s allegations to be factually impossible and false, noting the advisor’s consistent advice against moving the stock, corroborated by the 401(k)-call recording and her otherwise-clean record. Specifically, the Panel noted that the customer had “waited [to complain] until after she had transferred her account with the [advisor] to another firm” and that she had “then filed her complaint with the former firm only after she transferred her account to her new husband’s broker[.]” Additionally, the stock movement in question had occurred under a subsequent advisor.

The Panel awarded expungement of all references to the claim from the advisor’s CRD records, effective upon court confirmation per FINRA Rule 2080. The Panel based its decision on the erroneous and false nature of the claim, clearing the sole blemish on the advisor’s 13-year career. Soon, her CRD and public BrokerCheck® records will reflect her exemplary service to clients and the 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.