New York Advisor Wins Expungement Of 2023 Customer Complaint

In 2023, this seasoned New York-based financial advisor (FA) with nearly three decades of unblemished service faced a damaging customer dispute on his CRD and public BrokerCheck® records. The dispute alleged that he had misrepresented advisory fees charged to a client’s accounts. This false and misleading entry tarnished the FA’s professional reputation and threatened his career. Determined to restore his good name, he retained HLBS Law to pursue expungement through FINRA Dispute Resolution.

Since 1995, the FA had built a distinguished career, serving clients at firms including Citigroup, J.P. Morgan Securities LLC, and Morgan Stanley, where he has been registered since May 2021. In 2020, a high-net-worth client who was a podiatrist with over 25 years of investment experience, became the FA’s client at J.P. Morgan through a referral. In 2021, she transferred her accounts to Morgan Stanley following the FA’s move, with a portfolio focused on growth and an aggressive risk tolerance. 

In July 2023, the client alleged that the FA had misrepresented her advisory fees as 0.90%, claiming that she had been charged 1.1% or 1.2% and that he had exploited her distress after her husband’s death. The FA maintained that he had fully disclosed the fee structure—1.1% or 1.2% for equity accounts, 0.60% for fixed-income accounts—in multiple oral discussions, written disclosures, and signed agreements, with monthly and annual statements confirming the fees. 

Morgan Stanley conducted an investigation that was completed on August 22, 2023, and it denied the client’s claim, finding no evidence of misrepresentation. The client did not pursue the claim further.

Nevertheless, on July 11, 2023, a disclosure reported to the FA’s records falsely implied professional misconduct, severely impacting his reputation and ability to attract clients. 

The FA filed his Amended Statement of Claim with FINRA Dispute Resolution in October 2024, alleging that the allegations were factually impossible, clearly erroneous, false, and defamatory in nature, under FINRA Rule 2080 and seeking expungement of the occurrence from his records. Morgan Stanley filed an answer in which it did not oppose the expungement request. The client was served with both filings but did not appear at the hearing or submit documents, despite indicating her intent to participate.

The expungement hearing was conducted via videoconference in April 2025, with HLBS Law’s William R. Bean, Esq. and Owen Harnett, Esq. presenting the FA’s case through testimony, his BrokerCheck® report, and supporting evidence, including sworn testimony from Morgan Stanley’s registered client associate, who confirmed fee discussions.

The three-arbitrator FINRA Panel reviewed the pleadings, testimony, and evidence. They found the client’s allegations to be factually impossible, clearly erroneous, and false under FINRA Rule 2080(b)(1)(A) and (b)(1)(C), as documentary evidence and sworn testimony confirmed the FA’s full disclosure of the fee structure. 

In its award, the Panel stated that, “According to all sworn testimony, the Customer was informed multiple times that the rates were based on a higher percentage of equity in her portfolio, which she had requested, and which carried a higher advisory fee[; a]fter an extended period, the Customer informed the [firm] that she was paying fees she disagreed with and had informed the [firm] of this fact.” It also mentioned that the firm had “investigated the complaint and, by letter, informed the Customer that, based on its review, the [FA] had provided accurate information concerning the advisory fees.” The Panel ordered the expungement of all references to the occurrence from the FA’s CRD records, contingent on confirmation by a court of competent jurisdiction. 

The Panel’s decision restores the FA’s unblemished professional record. With this victory, he can continue his career free from the shadow of a baseless 2023 disclosure, reaffirming his commitment to integrity 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.