After nearly 25 years in the industry and nearly 20 with the same firm, a financial advisor was terminated by the firm for not having disclosed promissory notes issued by his wife’s start-up company. Not only did the advisor receive a Form U5 termination disclosure — he was also slapped with an internal review disclosure, and regulatory action was taken. With the help of AdvisorLaw, this advisor sought expungement of the termination and internal review disclosures through FINRA Dispute Resolution.
Michigan Advisor Removes Termination Disclosure From Records
An advisor in Michigan who has been in the industry for nearly 25 years had a ten-year-old Form U5 termination disclosure from FINRA with vague allegations pertaining to the advisor being the subject of a FINRA investigation. The advisor sought the help of AdvisorLaw in seeking expungement through FINRA’s Dispute Resolution.
Separating From Your Broker-Dealer
When a registered representative leaves a FINRA-affiliated broker-dealer, the firm must complete Form U5 and submit it to FINRA. If you’re leaving voluntarily and peacefully, this can be a simple process. But if your departure is contentious or less than voluntary, what is reported on your Form U5 can vary greatly, depending upon the choices made by the broker-dealer’s compliance and registration departments. In other words, an individual from the firm’s compliance department has the freedom to report how the events that led to your separation will be recorded on your permanent record.
Advisor Expunges Termination & Internal Review Disclosures
This advisor had a Form U5 termination disclosure on his records from nearly seven years prior. He hired us to represent him in FINRA arbitration in an effort to get the disclosure expunged. The advisor joined the firm in 2012, working exclusively with institutional investors. During his time with the firm, he did not receive adequate training on firm policies, and firm management never trained him on compliance.
Advisor Wins Expungement Of Duplicate Termination Disclosures
An advisor based in Arizona sought expungement of a FINRA Form U5 termination disclosure alleging that he had been permitted to resign after an investigation by the firm concluded that he had submitted sign-in sheets containing non-genuine signatures of third parties. The disclosure, which was dated 2019, was listed on the advisor’s public records twice, due to a duplicate filing.
FINRA Rule 3270: Outside Business Activities
All too often, advisors who hire AdvisorLaw to help them seek expungement of termination disclosures have Form U5 allegations relating to outside business activities (OBAs) and their disclosure, or alleged lack thereof. We frequently see instances where the advisor inquired about whether their involvement with an outside entity constituted an OBA, and they were told that they were not required to disclose it, only to later be terminated for alleged nondisclosure of an OBA. It seems that firms are largely inconsistent or vague when it comes to what does and does not constitute an OBA, as well as the proper method of disclosing the activities.