Arbitrators have denied the latest bid by a veteran Merrill Lynch market supervision manager to expunge an old customer complaint from her record, Advisor Hub reports.
A panel of three Financial Industry Regulatory Authority arbitrators weighed the case of Elizabeth Ann Sum-Slaughter, a Merrill employee in Raleigh, North Carolina. Two of them decided she met at least one of the criteria for expungement, but the other arbitrator disagreed and FINRA rules require a unanimous ruling for expungement. No explanation was given for the panel’s decision.
This was Sum-Slaughter’s third attempt to clear her record of a claim by a customer in 2011 for almost $263,000 based on an allegation of failure to supervise. The case was settled by Merrill for $104,000. Sum-Slaughter’s first expungement attempt was denied in arbitration in 2019, and her case was later dismissed in the Superior Court of the District of Columbia. She filed another expungement claim with FINRA in September 2024.
Her most recent setback comes in the aftermath of new rules adopted by FINRA in 2023 aimed at making it more difficult for brokers to expunge client disputes from their records. The reforms were developed in response to concerns that it had become too easy for brokers to clear customer complaints from their disciplinary history contained in the Central Registration Depository
Sum-Slaughter’s lawyer, Chelsea Bauer at HLBS Law in Charlotte, North Carolina, did not respond immediately to a request for comment.
With regards to the specifics of the customer’s complaint, Sum-Slaughter said in her BrokerCheck disclosure said she “was not involved in the underlying transactions” and “was named solely in her role as supervisor.” She also noted that she did not contribute to the settlement. Merrill Lynch did not support or oppose the expungement.
The panel who decided the most recent arbitration said they had reviewed the matter’s legal history, including its handling by other courts and arbitrators, but said it had
“no influence on our final ruling, with the decision based solely on the evidence and testimony presented at the substantive hearing.”
An AdvisorHub analysis found that after FINRA’s tougher expungement rules took effect on October 16, 2023, the number of brokers seeking expungement through FINRA dropped 79% over the next six weeks.
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.
