- SEC’s Enforcement: RIAs Under Scrutiny For Marketing Rule Compliance
- Illinois Advisor Wins Expungement Of 2016 Termination Disclosure
- Rising Tide: The Urgent Call For Advisor Succession Planning
- Arizona Advisor Achieves Expungement Of 2011 Customer Dispute
- Why RIAs Should Consider Outsourced Chief Compliance Officers
*If you’re under FINRA or SEC investigation, or if you have a meritless disclosure on your BrokerCheck, CRD, IARD, or IAPD record, call us right now at (303) 952-4025 to talk with an attorney and receive a priority consultation at no charge.
Award Date: August 4, 2023
Claimant Representative: Dochtor Kennedy, MBA, J.D.
Respondent Firm: Invest Financial Corporation
An investment advisor in Tennessee who has been in the industry since 2005 had a sole disclosure on his public BrokerCheck and CRD records. The mark reflected a customer dispute in 2013 that had been settled by the firm for $55,000. Hoping to restore his records, the advisor hired Advisor Law to bring him through FINRA Dispute Resolution.
In 2007, the pastor of our advisor’s church and his wife became clients of our advisor. The couple sought financial advice and a portfolio assessment. They had recently inherited money, and they sought growth and income with a secondary goal of providing their children with resources.
Our advisor discussed a variety of investments with the couple and recommended several diversified options, including a variable annuity and a life insurance policy. The investors liked the death benefits and liquidity that the policies offered. They purchased the policies and placed $130,000 into annuities.
Between 2007 and 2009, the investors paid annual premiums of about $14,000 on their life insurance policy, which they funded with income from their annuities. During that time, the pastor requested withdrawals from the policies, and our advisor suggested paying a smaller premium in an amount sufficient to keep the policy in force.
In 2008 and 2009, the investors’ portfolio declined along with the markets, and they later ceased funding their life insurance policy.
In 2013, the investors filed for arbitration in the state of Tennessee, alleging an unsuitable investment. The case evolved into FINRA arbitration, the firm settled, and our advisor’s otherwise-perfect record was scarred with a new disclosure.
The investors did not participate in our advisor’s expungement hearing. The firm did participate, though it took no position on our advisor’s request for expungement. The Arbitrator reviewed the settlement documentation, as well as the documents submitted by our advisor, the firm, and the customers. After listening to the advisor’s testimony and the arguments for expungement presented by Dochtor Kennedy, MBA, J.D., the Arbitrator made his recommendation.
In the award, the Arbitrator specifically pointed out that the customers had initially sued in state court “only against the broker” and that “They amended their complaint to add [our advisor], another financial advisor, and the insurance company as additional respondents[.]” The Arbitrator noted that our advisor “presented evidence that the Customers were fully informed of their purchase, and they signed numerous documents evidencing their understanding and acceptance of the purchase.” He mentioned that our advisor had “spent an unusually long period of time getting to know the Customers and their goals, risk tolerance, and time for return.” The Arbitrator pointed out that “The evidence shows that the Customers’ purchase was suitable at the time it was made” and that “the Customers did not pay their premiums as planned and thus reduced the value of their assets.” Adding that “The Customers’ complaint was also investigated by the insurance company who found the purchases were suitable, and [our advisor] went above and beyond his obligation to help the Customers,” the Arbitrator concluded that “the Customers’ version of events is not credible, not supported by the evidence, and therefore is factually impossible and false.”
With the successful expungement of this sole disclosure, our advisor’s excellence in his career will once again be reflected in his perfect public records.
- Illinois Advisor Wins Expungement Of 2016 Termination Disclosure - September 25, 2023
- Arizona Advisor Achieves Expungement Of 2011 Customer Dispute - September 15, 2023
- FINRA Crackdown — Outside Business Activities - September 7, 2023