Respondents generally denied the allegations and asserted various affirmative defenses.
During the evidentiary hearing, the FINRA Arbitrator would not qualify Claimant’s proposed expert as an “expert.” Nonetheless, the Arbitrator noted that the exclusion of the proposed expert had no impact on the decision because she was ”satisfied with the sophistication of the investor who ratified the investments through actions taken and the pattern and practice followed.”
SIDE BAR: Sadly, as is too often the case with FINRA Arbitration Decisions, we just don’t have enough facts or enough rationale to make much of what’s officially reported to us.
As best I can infer, a key aspect of this case was whether Claimant Weller was sophisticated enough to make whatever trading decisions were at issue. Presumably, her proposed expert might have shed some light on that question but for the fact that the Arbitrator didn’t find that individual qualified to give the desired testimony. Regardless, the Arbitrator noted that even if the expert’s testimony were allowed, she still found enough additional evidence to dispose of the issue of Claimant Weller’s sophistication. In essence, the expert’s testimony apparently would not have mattered.
Cleaning Up the Record
The FINRA Arbitrator dismissed, with prejudice, the claims. Further, the Arbitrator recommended the expungement of all references to the arbitration from Respondent Alford’s Central Registration Depository (“CRD”) records, subject to the procedural requirements of NASD Notice to Members 04-16: Expungement.
The Arbitrator recommended the expungement after finding clear and convincing evidence that:
Claimant Weller’s father was making all of the investment decisions and the Claimant ratified them through her practice of allowing all statements to go to his address and allowing him to keep the Trust’s checkbook and sign her name on checks and financial documents. Her father even sent communications from her email account in her name. The complaint in this action lies with Ms. Weller’s father. Respondent Alford was following a consistent pattern and practice ratified by Ms. Weller in this account . . .