Defend Your Professional Integrity

As a broker, your reputation is everything. So what happens when your record becomes tainted by a frivolous customer complaint, even if the firm denies the complaint or settles it and the customer drops the matter?

Unless the complaint is expunged, it stays on your public record (i.e., BrokerCheck, CRD) forever. FINRA Regulatory Notice 10-34 which became effective in August 2010 amended FINRA Rule 8312 so that such complaints are no longer archived after two years. Increasingly stringent regulations have made this information more accessible to investors. First, the revised Form ADV Part 2B now requires registered investment advisors to include in the annual letter to clients all “material legal events,” a requirement that many firms have interpreted to include anything on BrokerCheck. Secondly, because of the recently passed Rule 2210 amendment, effective June 6th of this year, FINRA began enforcing the new requirement that “a readily apparent reference and hyperlink to BrokerCheck” be including on member firms’ homepages and “any other page that includes a profession profile of one or more registered persons who conduct business with retail investors.” See FINRA’s Regulatory Notice 15-50

As FINRA takes additional steps to increase both existing and potential customer awareness of these types of disputes, these disclosures will increasingly impact your professional success. Although one complaint which was denied may not seem like a big deal, market research indicates 30% of potential customers would choose not to work with a financial advisor who had any complaint on their BrokerCheck. The denial itself is also inconsequential because any discovery of a complaint will invariably yield the fact that a previous customer lost money, felt deceived, or another undesirable conclusion. Any publicity about a dissatisfied client is bad publicity! Unfortunately, with the increase in use and reference to BrokerCheck many firms are now parting ways with otherwise successful brokers that have complaints on the record. These disclosures, which are difficult to deal with even if the firm pledges its full support to you, can be much more troublesome when you leave. If you find a new firm willing to hire you, you have to overcome any concerns raised by the new firm’s compliance department, state regulators, and any derogatory statements made by former colleges intent on keeping your old clients at the firm.

Seeking an award of expungement is the only option. The typical costs of expungement with a securities attorney depending on complexity can range from $25,000 to $50,000, plus FINRA fees.

However, at Wilson Law our fees are competitively set per Customer Dispute Expungement and clients may request to

receive flat, fixed-fee pricing without the risk of needing to contribute capital in addition to what was anticipated.

A good reputation is priceless and an expungement award, thankfully, can restore it.


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