Arbitrators have decided that a Florida-based Merrill Lynch broker can expunge a complaint filed by a former CNN anchor, according to Advisor Hub.
The $56 million complaint was filed in arbitration in 2023 by Richard “Rick” Sanchez against Angel Ferrer, who joined Merrill from Citigroup’s Private Bank. Sanchez accused Ferrer of overconcentrating his assets in a financially troubled healthcare company in Miami, Caro Health. Sanchez alleged that Ferrer failed to provide advice on a concentrated position, and that he was encouraged to use a line of credit to add to his position.
Sanchez and his wife brought claims against Citigroup of violation of the SEC’s Regulation Best Interest, negligent supervision of Ferrer and breach of fiduciary duty.
But a panel of Financial Industry Regulatory Authority arbitrators sided with Ferrer in his attempt to clear his record. The FINRA panel said the allegations were completely false, adding that Ferrer and his partner had “consistently urged” Sanchez and his wife to “avoid the risk of concentrating their holdings in a single security.”
In their award, the panelists stated, “Claimants chose to ignore the advice” of the advisors and “further concentrate their holdings in a single security,” and cited “undisputed evidence” including “contemporaneous call reports, emails and brochures.”
Citi settled the claim for $750,000 without any contribution from Ferrer or his partner, who was also granted expungement.
Spokespeople for Merrill and Citi did not immediately respond to requests for comment. A lawyer representing Sanchez, Jeffrey R. Sonn, also did not return a request for comment.
Sanchez filed the complaint after the investment in Caro Health, which operates primary care centers for seniors. After going public in 2021, Caro was reported to have lost 99% of its market value, laid off employees and reshuffled its board after mismanagement allegations, according to the AdvisorHub report.
The attorneys at Hyman Cotter PC have 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 Hyman Cotter PC at 312-291-4600 or through our online contact form for a free consultation.
