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Award Date: November 14, 2023
Claimant Representatives: Dochtor Kennedy, MBA, J.D. and Peter Lindholm, J.D.
Respondent Firms: Pruco Securities, LLC. And SunAmerica Securities, Inc.
Case Objective & Summary:
An investment adviser representative (IAR) in Tucson, Arizona has been in the industry since 1987. His records were stellar, aside from two customer disputes that had hit his records between 2001 and 2003. After dealing with the repercussions of having the marks on his records for more than 20 years, the IAR hired AdvisorLaw to help him seek expungement through FINRA Dispute Resolution.
The first dispute was lodged in mid-2001 when a customer alleged that the advisor had made misrepresentations in 1991 about when a variable insurance policy would be fully funded. The customer had sought about $20K in damages, and Pruco had denied the claim.
The second claim had been filed by a couple in the fall of 2003. They alleged, through their attorney, that the IAR had made unsuitable recommendations. They sought $340K in damages, and SunAmerica had settled the claim for $90K.
Result:
Both respondent firms participated in the FINRA expungement hearing, though neither firm opposed the IAR’s request for expungement. The first customer was deceased, and the couple who lodged the second claim did not participate in the hearing. The FINRA Arbitrator reviewed the couple’s complaint letter to Pruco and the IAR’s documents that had been submitted to FINRA. He also listened to arguments presented by Dochtor Kennedy, MBA, J.D. and Peter Lindholm, J.D., as well as the IAR’s testimony.
Regarding the first complaint, the Arbitrator “[found] that the allegation that [the IAR] represented that the variable annuity would be fully paid up in 7 years is false.” For the second claim, the Arbitrator noted that the customers had “filed an arbitration with NASD and [the IAR] was dismissed from the case before it was settled for 25% of the claim.” He stated that he “finds that the claim was clearly erroneous,” that the IAR “did not make unsuitable recommendations, and all transactions were approved by [the customers.]” Finally, the Arbitrator mentioned that the “Alleged losses were caused by market conditions and settlement was made to avoid the costs of arbitration.”
The Arbitrator recommended the expungement of both disputes. Now for the first time in more than two decades, this IAR will soon be able to boast that he has perfectly clear public records.