Further, the assertion by Claimant's counsel that the settlement agreement was beyond reach and not available for review in this case is belied by the fact that the settlement agreement apparently was produced in the related expungement case brought by AW, a case in which AW was represented by the same counsel who represents Claimant in this case. It is troublesome to say the least that counsel failed to produce the settlement agreement and thereby risked having Claimant's expungement case dismissed on procedural grounds for failure to comply with Rule 13805 of the Code of Arbitration Procedure ("the Code"). 

According to the testimony of Claimant, which was credible throughout, the son of the customer called Claimant after business hours sometime in the fall of 2010 and left a voicemail message regarding the account of his mother, the customer, in which he asked who had authorized certain bond purchases in his mother's account. The son had no authority over his mother's account. The customer made all the trading decisions for the account, although Claimant understood that the customer often consulted with her son before making trades. There was no follow-up to the voicemail by either the son or the customer. The customer did not make a written or oral complaint or demand any compensation for losses in her account. After the voicemail, the customer continued to do business with Claimant for two more years. Respondent, Claimant's firm at the time, at first did not regard the telephone message as a customer complaint. Only after a FINRA examiner advised the firm to do so, was the voicemail reported as a customer complaint. Claimant testified the substance of the voicemail was a question, not a complaint. Moreover, according to FINRA's Form U4 and Form U5 Interpretive Questions and Answers, "an oral complaint by itself is not reportable under Question 14I(3)". Based on the entirety of Claimant's testimony and FINRA's Form U4 and Form U5 Interpretive Questions and Answers, the message left by the customer's son on Claimant's voicemail was not a reportable complaint and, therefore, the information reported to the CRD regarding the voicemail was "clearly erroneous." 

According to the testimony of Claimant, which was credible throughout, the husband and wife (collectively "customers") opened an account with Claimant at Respondent in 1996. At the time, the customers were high net worth clients and their risk tolerance was high. Claimant was the representative for their account until 1997, when he went into management at Respondent. At that time, the customers' account was transferred to AW, another representative at Respondent. While the account was being handled exclusively by AW, the customers began investing in Erickson Retirement Communities STAMPS ("Erickson"), a completely subordinated and unsecured debt security. Claimant, because he was in management at the time, was not involved with the customers' first two purchases of these securities in 2003 and 2005, both of which paid interest in full and were redeemed at maturity. In 2006, Claimant left management and returned to representing Respondent's customers, going into partnership with AW. AW's book, at the time, included the customers (as well as others that Claimant serviced prior to becoming management). When Claimant partnered with AW, AW continued to be the representative primarily servicing the customers' account. In 2007, working only with AW, the customers reinvested in Erickson and increased their commitment from $100,000.00 to $200,000.00, which was about 3.4% of their portfolio. In 2009, the Erickson bonds defaulted and the customers lost their entire investment. In late 2012, the customers filed an arbitration claim against Respondent alone, claiming the Erickson investment was unsuitable for them. Neither Claimant nor AW was named as a respondent in the arbitration case. The arbitration claim was for $1,400,000.00, and ultimately was settled by Respondent for $90,000.00 and paid solely by Respondent. Claimant was not involved in the settlement negotiations and was not made a party to the settlement. Although there was credible evidence, by way of Claimant's testimony and some documentation, that the customers had a high net worth, at least a moderate tolerance for risk, and extensive investment experience, all of which could support the conclusion that the Erickson investment was suitable for them, I do not think a suitability determination can be made in this case where the issue was not, and could not be, fully tried. However, the evidence does support the conclusion that Claimant was not involved in the initial introduction of the Erickson securities to the customers or their decision to invest further in these securities in 2007. Although he was AW's partner, if there was a sales practice violation in the case of the customers' investment in Erickson, Claimant was not the violator.