In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in May 2011, Claimant Bickham sought an expungement from his Central Registration Depository record ("CRD") of a customer arbitration that had been filed in 2009 against UBS. In that 2009 arbitration, UBS was the only named Respondent; however, Bickham and two other UBS registered representatives were indentified as financial advisors in the Bishop Statement of Claim. Claimant Bickham asserted that he never directly serviced any of the claimants in Bishop. In the Matter of the FINRA Arbitration Between Robert Joseph Bickham, Claimant, vs. UBS Financial Services, Inc.,Respondent (FINRA Arbitration 11-02056, October 7, 2011).
Contrary to the typical FINRA Arbitration, here, Respondent UBS admitted that Claimant Bickham's allegations were consistent with the facts in Bishop, and the member firm supported Claimant's expungement request.
SIDE BAR: You got that?
We supposedly have Bickham suing UBS in order to get his name cleared - however, UBS isn't denying the allegations and supports the expungement request. Moreover, the source of all this confusion is a customer arbitration that didn't even name Bickham as a Respondent. Despite all of that, the customer arbitration apparently wound up as a disclosable matter on Bickham's CRD because the customer identified him as a registered representative involved in the matter.
Of course, Bickham says that he had nothing whatsoever to do with the customer and his name should never have been dredged up in the case. Thus the impetus to get his name cleared.
The sole FINRA Arbitrator hearing this matter reviewed the Settlement Agreement in Bishop, and heard testimony and reviewed the evidence in Bickham's arbitration against UBS. As a consequence, the Arbitrator recommended the expungement of Bishop from Claimant Bickham's CRD.
In reaching that decision, the Arbitrator found that Claimant Bickham had:
[N]ever spoken or met with any of the Claimants in the underlying case, FINRA Case No. 09-03723 (Bishop), regarding their overall or specific financial situation or investments and that he never served as their invest representative.
Although I applaud the Arbitrator's Decision, this is still a frustratingly silly case - no, asinine would be more apt. Frankly, the inequity of the FINRA expungement process in this case is so apparent as to cast shame on FINRA and the state and federal regulatory bureaucratic foolishness that compels such nonsense.
In Bickham, we have an individual stockbroker who had previously been wrongly referenced by name in a customer-complaint arbitration case. In many civil, criminal, and adminstrative proceedings, such a reference would have been made as "JOHN DOE" or "BROKER B." Frankly, even FINRA's regulatory proceedings often resort to such references or outright blackened redactions on published documents.
Unfortunately, in a supreme exaltation of form over substance and principle over fairness, Wall Street's regulatory system requires that under the circumstances in Bickham, that the wronged broker file a sham arbitration against a somewhat conspiratorial employer in order to create the false appearance of a contested matter that requires adjudication.
Even when forced to play such games, the individual stockbroker cannot obtain an order of expungement that is self-executing from the FINRA Arbitrator. To the contrary, the best that can be won in this farce of an arbitration is a mere "recommendation" of expungement - that requires Claimant Bickham to incur further costs by taking the Arbitrator's recommendation of expungement to a court of law for confirmation. Pointedly, NASD Notice to Members 04-16: Expungement states that:
Rule 2130 continues the requirement started with the January 1999 moratorium that a court of competent jurisdiction must order or confirm all expungement directives before NASD will expunge customer dispute information from the CRD system. Under Rule 2130, members and associated persons seeking to expunge from the CRD system information arising from disputes with customers must obtain an order from a court of competent jurisdiction directing such expungement or confirming an arbitration award containing expungement relief.
[M]embers and associated persons seeking a court order to expunge must name NASD as an additional party and serve NASD with all appropriate documents unless NASD waives that requirement. . .
An online FINRA record discloses as of October 13, 2011, the following comment on Claimant Bickham's current CRD :
THIS SETTLEMENT WAS AGREED TO BY UBS AND INVOLVED SEVERAL OTHER FINANCIAL ADVISORS OF THE FIRM. ALTHOUGH MY NAME WAS INCLUDED IN THE COMPLAINT, I NEVER AT ANYTIME SERVED AS FINANCIAL ADVISOR TO ANY OF THE CLAIMANTS. FURTHERMORE, I NEVER AT ANYTIME MET NOR SPOKE WITH ANY OF THESE INDIVIDUALS REGARDING THEIR OVERALL OR SPECIFIC FINANCIAL SITUATION. I DID NOT AGREE TO THE SETTLEMENT NOR DID UBS SEEK MY INPUT OR APPROVAL.
AFTER 28 YEARS OF A CLEAN COMPLIANCE RECORD OF WHICH I AM VERY PROUD, I AM IN THE PROCESS OF SEEKING AN EXPUNGEMENT FROM MY RECORD. GIVEN THE FACTS OF THIS COMPLAINT AND MY COMPLETE LACK OF INVOLVEMENT WITH CLAIMANTS, UBS HAS AGREED TO FILE EXPUNGEMENT PROCEEDINGS ON MY BEHALF AND PLAINTIFFS HAVE CONSENTED TO EXPUNGEMENT OF THE COMPLAINT
Frankly, to pretend that this case is anything but a regulatory matter that properly belongs before FINRA's regulatory organization rather than its alternative dispute resolution unit is ridiculous. There is no lawsuit here. There is nothing even at issue here involving any "dispute" with a public customer or a member firm. This is simply the ugliness of a Kafkaesque procedure that piles pretend upon pretense.