The BrokeAndBroker.com Blog's publisher Bill Singer, Esq. takes this last opportunity in the waning days of 2017 to rage against the machine and call for the reform of FINRA's failed expungement system. As Singer notes, the present appellate process by which Wall Street's men and women seek to clear their names is a bastard child no one claims as their own. Public advocates are correct that Wall Street's bygone practice of buying and selling indulgences was a disgrace that needed to be stopped. Similarly, the industry had ample warning of the need to tend to its own mess but chose to do nothing. Consequently, the present expungement process is an angry reaction to a persistent failure to reform. Unfortunately, the ensuing rush to judgment yielded what such angry efforts will: a lack of balance and fairness. For those industry men and women whose good name is besmirched by the mistaken complaint or the erroneous allegation -- no matter how few in number those innocent victims may be -- the relief is little more than a rigid system that takes too long, costs too much, and, in the end, sends the victor on an even more time-consuming and expensive route to the courts.
Municipal Bond TransactionsThe basis for the Customer complaint and amendment to Claimant's CRD involved three separate transactions. The first transaction concerned the purchase of seven (7) municipal bonds. The Customer complained of a commission charge of $4,848.21. This figure appears on the confirmation for the transaction, but as the net amount of the transaction and not the commission. Accordingly, the Customer's claim of an excessive commission is both clearly erroneous and false.The Customer also complained of a loss, which appeared on her April 30, 2017 statement, seven (7) months after they were purchased in September 2016. Based on Claimant's notes which are dated contemporaneous with her meetings, Claimant explained the fluctuating nature of bond values and that changes in value do not typically impact the income stream, which was the purpose for buying them. The Customer's claim that the loss in value was a "surprise" is both clearly erroneous and false.J.P. MorganThe Customer complained that she was charged a commission of $257.01 and not the $157.00 amount Claimant advised was the commission. A review of the trade confirmation confirms that the "charge/commission" was $157.00. The "257.01" amount appears in the figure stated for the Net Amount of the trade, $15,257.01. Accordingly, her claim that she was charged a commission of $257.01 is both clearly erroneous and false.Synchronv Bank CD ("CD")The Customer first complained that the value of the CD was $160,435.65 at the time of transfer. However, the account statement for October 2016 shows that its value was $159,564.00 at the time of transfer. Accordingly, the Customers claim that she suffered a loss at the time of transfer is both clearly erroneous and false.The Customer also claims she incurred a loss of $5,301.15 when the funds were transferred out of the Wells Fargo account. However, she purchased the CD at a cost of $150,000 and, at the time of transfer, the value of the CD exceeded her cost. Accordingly, her claim that she suffered a loss at the time of transfer is both clearly erroneous and false.
- FINRA Rule 2080: Obtaining Customer Dispute Expungement
- FINRA Rule 2081: Prohibited Conditions Relating to Expungement of Customer Dispute
- FINRA Rules 12805 and 13805: Expunging Customer-Dispute Information Under Rule 2080