FINRA arbitrator rules client complaint can be expunged from advisor’s record

On Behalf of | Nov 24, 2021 | FINRA Compliance

A Financial Industry Regulatory Authority arbitrator has ruled that a client’s complaint can be expunged from the record of a Nebraska financial advisor, AdvisorHub reports.

The FINRA arbitrator adjudicated the case involving Ronald L. Carson, owner of Carson Wealth Management (CWM) in Omaha Nebraska. In 2018, a former client filed a complaint alleging that a product sponsor was improperly notified by CWM that the client’s relationship with the firm had been terminated. As a result, the client was charged standard fees by the sponsor as opposed to a discounted fee that had been negotiated with CWM through its investment agreement.

The sole public arbitrator in the case, Mark L. Miller, ruled in favor of Carson in his bid to clear the complaint from his record. Miller determined that Carson had fulfilled his obligation to tell the sponsor that the client was no longer with CWM and was no longer eligible for the lower rate.

Miller added that there were no facts to support any claim that Carson had “engaged in improper sales practices”. Under FINRA Rule 2080, members seeking to expunge information arising from disputes with customers must show “the claim, allegation or information is factually impossible or clearly erroneous”, and Miller said Carson had met that standard.

The claim involved in the dispute was settled in March for over $782,000 by the American Arbitration Association, but Carson pointed out in his BrokerCheck report that he did not contribute to the settlement between the parties and that the matter was dismissed with prejudice and closed. In his award, Miller noted that nearly the entire settlement was paid by the third-party product sponsor.

At Lewitas Hyman, our firm has considerable experience with FINRA’s procedures for expunging false, defamatory and erroneous disclosures from a registered representative’s record. This experience includes seeking expungement in existing FINRA customer and employment arbitrations, as well as filing separate FINRA arbitrations for the sole purpose of seeking expungement. If you have any concerns about problematic disclosures on your CRD record or those that are viewable on FINRA’s BrokerCheck portal, contact the FINRA expungement attorneys of Lewitas Hyman at (312) 291-4600 or through our online contact form for a free consultation.

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