New York Advisor’s Records Expunged Of Sole Disclosure From 2023

In 2023, after over two decades of exemplary service in the financial industry, this New York-based advisor faced a termination disclosure on his CRD and public BrokerCheck® records. The Form U5 filed by LPL stated that the advisor had been “discharged” for using an unapproved email address for business-related communications. The misleading entry tarnished the advisor’s reputation and hindered his ability to secure employment. Determined to clear his name, he retained HLBS Law to pursue expungement through FINRA Dispute Resolution.

The advisor had built a distinguished career, including 23 years with LPL, between February 2000 and December 2023. In mid-2023, he inadvertently used a personal email account to respond to a client’s inquiry about liquidating a 401(k), promptly forwarding the conversation to his work email upon realizing the error. The mistake resulted in the advisor being placed under heightened supervision. Additionally, the advisor used his personal email to discuss real estate investment trusts (REITs) with his nephew, who was not his client, and to briefly respond to a childhood friend and client about liquidating a REIT. In both cases, no investment advice or solicitation occurred, and the advisor immediately shifted communications to his work email. No client harm or complaints resulted from the incidents.

On January 4, 2024, LPL filed a Form U5 stating that the advisor was “discharged” on December 28, 2023, for using an unapproved email address to transmit business-related communications. The advisor argued that the entry was defamatory-in-nature and misleading, as his actions were unintentional, involved no unethical conduct, and did not warrant termination. The disclosure severely impacted his ability to find employment and attract clients, causing significant financial hardship.

The advisor filed his Statement of Claim with FINRA Dispute Resolution on August 8, 2024, seeking expungement of the termination disclosure. He argued that the Form U5 entry was defamatory and misleading under FINRA Rule 8312(g)(1), as it implied intentional misconduct or insubordination. LPL filed an answer in September 2024, denying the allegations and asserting affirmative defenses, while also not opposing the expungement request. 

The expungement hearing was conducted via videoconference, with HLBS Law’s Austin Davis, Esq. and Owen Harnett, Esq. presenting the advisor’s case through testimony and supporting evidence.

The sole FINRA Arbitrator reviewed the pleadings, testimony, and evidence. She found the termination disclosure to be defamatory in nature, as the advisor’s use of a personal email was unintentional, involved no client harm, and did not justify termination. The Arbitrator noted that the entry “tends to mislead the public” by suggesting unethical or terminable conduct, contrary to FINRA Rule 1122. She ordered the expungement of the Reason for Termination and Termination Explanation from the advisor’s Form U5, changing the Reason for Termination to “Voluntary” and deleting the Termination Explanation entirely. All references to the occurrence, including Termination Disclosure Details (U4 and U5) and Reporting Pages, were ordered expunged from the advisor’s CRD records, as well. Additionally, LPL was ordered to reimburse Agrillo $25 for the nonrefundable portion of the FINRA filing fee.

The Arbitrator’s decision will restore the advisor’s unblemished, professional record. With this victory, he can continue his career free from the shadow of a misleading 2023 disclosure, reaffirming his commitment to integrity in the financial services industry.

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