April 30, 2018
In promoting its online BrokerCheck, FINRA asserts that "BrokerCheck is a free tool to research the background and experience of financial brokers, advisers and firms." Yeah, tool indeed! Consider a recent FINRA arbitration and how useful BrokerCheck would be in researching some of the named parties.
Case In Point
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in June 2016. As set forth in the FINRA Arbitration Decision, Claimant Taylor asserted:
constructive discharge; diminution in the value of Claimant's career; illegal termination; failure to live up to the covenant of good faith and fair dealing in contractual relationship; breach of employment contract; tort; interference with business contracts and relationships; failure to act in good faith; and failure to provide employees with full and accurate information. The causes of action relate to Claimant's resignation from his employment with Respondents, Respondents' alleged mismanagement of their Puerto Rico closed-end funds, compensation allegedly owed by Respondents to Claimant and Respondents' alleged impact on Claimant's career as a financial advisor.
Claimant Taylor sought $10 million in compensatory damages plus unspecified compensatory damages for his:
Additionally, Claimant sought punitive damages; attorneys' fees; interest; and the costs. At the close of the hearings, Claimant requested an award of $4,393,722.00; vesting of $1,235,727.00 in deferred compensation; and attorneys' fees. In the Matter of the FINRA Arbitration Between Wilson Dennis Colberg-Trigo. Claimant, vs. UBS Financial Services, Inc. and UBS Financial Services Incorporated of Puerto Rico, Respondents (FINRA Arbitration 16-01865, April 26, 2018).
- mental pain and anguish associated with his alleged illegal termination; and
- vacation leave pay and applicable penalty.
The UBS Respondents generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim against Colberg-Trigo. The UBS Respondents asserted breach of promissory note arising from Claimant Colberg-Trigo's alleged failure to repay $1,240,627.05 representing the sums on four promissory notes dated 2009, 2010, 2011, and 2014, that were allegedly due upon his resignation. Claimants sought repayment of the notes' balance, costs, expenses, attorneys' fee, and interest. At the close of the hearings, UBS Respondents sought $20,000 in attorneys' fee and $854,156.77 in compensatory damages, which took into account Claimant's request that $388,443.00 in vested deferred compensation (undisputed by the parties) be applied to offset the Notes.
On Second Thought
On November 17, 2017, the parties were advised that an Arbitrator, who had previously been appointed as "public," had her classification had been changed to non-public based on FINRA's revised definition of a non-public arbitrator effective October 9, 2017.
The FINRA Panel of Arbitrators found the UBS Respondents were jointly and severally liable to Claimant Colberg-Trigo and ordered them to pay to him $1,235,727.00 in compensatory damages plus interest. The Panel denied Claimant Colberg-Trigo's tort claims.
The FINRA Panel of Arbitrators found Claimant Colberg-Trigo liable to the UBS Respondents and ordered him to pay to them $854,156.77 in principal on the notes.
The Panel offset the two awards and ordered the UBS Respondents to pay to Claimant the net sum of $381,570.23.
Billsinger's [sic] Comment
As part of my research for today's BrokeAndBroker.com Blog I attempted to use FINRA's BrokerCheck as advertised; namely, as a free tool to research the background and experience of financial brokers, advisers and firms. I entered Claimant Wilson Dennis Colberg-Trigo's name into the online FINRA BrokerCheck search field as it was spelled in FINRA's official, published FINRA Arbitration Decision. I got zilch.
I then filled in the "at" filed with "UBS" and tried variations on Colberg-Triton's first name(s). Zippo again. No matter how many times I entered Wilson Colberg-Trigo into FINRA's BrokerCheck record search field, I kept getting this message:
You likely know the drill from here. First, you carefully re-read and re-read again the individual's name and you slowly enter each and every letter into the search field. Still . . . you get "No Results." You start trying variations. Nope. Then you throw a few things and curse. Figuring it's you and not the database, you enter the name again and again. Now you start cursing. You try "Wilson Trigo." Nothing. Then, your fingers inadvertently hit something and you enter a search with misspellings and, what the hell?
Colbergtrigo? Colbergtrigo?? Wilson D. Colberg??? I mean, seriously???? This is FINRA's vaunted first line tool of inquiry for public customers?????
Let me make sure you understand the problem here. BrokerCheck is likely some multi-million-dollar online searchable database that is among FINRA's crown jewels in terms of publicity and marketing. I enter a registered representative's correct name into BrokerCheck as set forth in one of FINRA's published, public FINRA Arbitration Decisions and the self-regulator's online database can't locate the individual's BrokerCheck file?
How the hell is anyone supposed to know that you need to enter Colbergtrigo for what FINRA tells you is Colberg-Trigo -- and even assuming that such a revised data entry would work, why isn't that factored into FINRA's "what if" coding for its online records?
Taken to an even more absurd conclusion, FINRA apparently knows that it has registered the same individual under the names of "Wilson D. Colberg" and "Wilson Colbergtrigo" because both of those names are disclosed above but the self-regulatory-organization can't generate a record for Wilson Colberg-Trigo, a name that this individual and is known to FINRA because that organization published the third variation of the individual's name in the caption for its arbitration decision.
I place no blame whatsoever on Mr. Colberg-Trigo, who does not appear to be engaging in any subterfuge whatsoever. I place all the blame on FINRA for maintaining what appears to be a somewhat half-assed public customer interface. You'd sort of think that when FINRA publishes an Arbitration Decision with a registered representative's name in the caption that someone would routinely enter that name into BrokerCheck to confirm the spelling and ensure that inquiring public customers don't get diverted to a dead-end.