DEFENDING YOUR PROFESSIONAL INTEGRITY
Stay current on recent changes in the regulatory environment
Many FINRA registered reps were pummeled by Customer Disputes after the February 2008 market collapse. Any of those disputes relating to Auction Rate Security investments are low-hanging fruit for expungement from the CRD system entirely.
On March 31st of 2016, FINRA Dispute Resolution granted a former OpCo broker an expungement request to expunge two customer disputes (Case No. 15-01548). Both of the customer disputes stemmed from the investors’ allegations of “unsuitability and misrepresentation” in regard to their purchase of ARS’s. The decision to grant the expungement was based upon the Panel’s finding that B/D’s “failed to advise clients that auction rate security investments are complex and despite contrary assurances, may become illiquid.” The failure was of a global nature and the investors’ losses became a nullity due to the widespread repurchase of ARS’s by B/D’s at that time. In addition, the Panel determined that the advisor’s “representations were no different from any other registered representative trading the same or similar investments.”
If you have one or more Customer Disputes on your BrokerCheck profile which occurred because of an investor’s ARS investment, they can be fully expunged from the Web CRD system by pursuing expungement through the FINRA Rule 2080 arbitration process. AdvisorLaw exclusively represents FINRA licensed professionals in regard to various regulatory matters. We are currently working with over 280 reps.
Since the June 6, 2016 enforcement went into place for the FINRA Rule 2210 Amendment, requiring a “readily apparent hyperlink to BrokerCheck” on any page containing a registered rep’s professional profile, many advisors are feeling the heat of inquisitive clients.
Isn’t it time to get rid of the Customer Dispute disclosures from your U4 once and for all?
President, Managing Attorney
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Broomfield, CO 80020
Main Ph: (303) 952-4025
Fax: (720) 452-0613
This blog is my ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.