In April 2009, public customer Joyce Yabkow filed a FINRA Arbitration Statement of Claim against Respondents Citigroup Global Markets, Inc. and William J. Burns seeking damages in the amount of $360,000.00, interest from the date of loss, attorneys' fees, and costs. In keeping with such public-customer disputes, FINRA's arbitration award merely explains that the "causes of action relate to unspecified securities;" however, we are informed that Yabkow's claim asserted causes of action in negligence, failure to enact reasonable safeguards, failure to exercise due care, breach of fiduciary duty, unauthorized transfer of funds, and breach of contract. Respondents denied the allegations made in the Statement of Claim and asserted various affirmative defenses. In the Matter of the Arbitration Between Joyce Yabkow, Claimant, vs. Citigroup Global Markets, Inc. and William J. Burns, Respondents (FINRA Arbitration 09-02318, September 30, 2010).
By correspondence dated July 26, 2010, Claimant Yabkow notified FINRA Dispute Resolution that the parties settled this matter.
Request for Expungement
By correspondence dated August 4, 2010, Respondent Burns requested expungement of his CRD records. The Panel conducted a recorded in-person hearing on September 2, 2010 so the parties could present evidence on Burns' motion for expungement. The Panel reviewed the settlement documents and considered the payment made by Citigroup and other terms and conditions of the settlement.
The FINRA Arbitration Panel heard the sworn telephonic testimony of Respondent Burns. It also heard the argument of his attorney concerning the matter. Furthermore, the panel reviewed the pleadings and the settlement agreement between the parties. Claimant Yabkow did not appear to contest the expungement request.
Based upon its review of the pleadings and settlement agreement, the testimony of Respondent Burns and the presentation of his attorney, the Panel unanimously determined that Respondent Burns was absolutely not involved in any fraud or misappropriation of funds, nor was he negligent in the handling of Claimant's account. The Panel determined that Respondent Burns was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds. Moreover, the Panel noted that Claimant Yabkow alleged that she had been defrauded by her husband over the years by him forging her signature to effect transfers of money. There was no allegation that Respondent Burns, assisted or was aware of the alleged fraud.
Accordingly, the Panel recommended the expungement of all reference to the above captioned arbitration from Respondent Burns' registration records maintained by the Central Registration Depository ("CRD"), with the understanding that pursuant to Notice to Members 04-16, Respondent Burns must obtain confirmation from a court of competent jurisdiction before the CRD will execute the expungement directive. Unless specifically waived in writing by FINRA, parties seeking judicial confirmation of an arbitration award containing expungement relief must name FINRA as an additional party and serve FINRA with all appropriate documents.
Bill Singer's Note: An interesting case and outcome. I also applaud the Panel for its concise explanation as to why it expunged Respondent Burns' CRD file.
For examples of FINRA cases in which "signatures" and allegations of "forgery" are involved, see these links:
Also, see this article for a discussion of "husband and wife" problems involving brokerage accounts:
Robert Ingram held himself out as the director of an investment program that would enable investors to share in the proceeds of an alleged $23 billion "note" underwritten by the Federal Reserve. My, you say, that sounds impressive -- you know, the Federal Reserve is a pretty august body and when you're talking about a multi-billion dollar note that the Fed has underwritten, well, geez, that's pretty sophisticated stuff. This Ingram fellow must be a pretty savvy guy to be the director of a multi-billion dollar Federal Reserve Note investment program -- maybe they refer to that as the FRNIP? I mean, you know, they always have acronyms for such important things.
So -- Robert Ingram was the Director of a FRNIP.
Or so you would think. Or so you were supposed to think.
Next -- enter one Olivia Jeanne Bowen. Bowen was a facilitator for Ingram's FRNIP.
What's a FRNIP facilitator? Well, if you're going to show your ignorance by asking such a stupid question, then maybe this just isn't the right investment opportunity for you. After all, everyone who wants to invest in a FRNIP gains entry to the program via the good offices of a professional facilitator. Waddya, some kinda idiot? Imagine wasting my valuable time with such a question.
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