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Customer's Wife Rescues Former Edward Jones Broker In Expungement Case
July 10, 2019
An Edward Jones stockbroker met with a customer and they agreed to reduce risk and increase income via portfolio rebalancing. Within a month of the rebalancing and after the stockbroker had departed the firm, the customer seemed to have complained that the trades were unauthorized. In response, Edward Jones cancelled the trades and the customer's complaint was noted on the former stockbroker's industry record. About a year after the busted trades, the stockbroker filed an arbitration against his former employer in an effort to expunge the purported customer complaint. What ensues is a tribute to both the FINRA Arbitrator deciding the case and the stockbroker's lawyer.
Case in Point
In a FINRA Arbitration Statement of Claim filed in December 2018, associated person Claimant Walker sought the expungement of a customer complaint from his Central Registration Depository record ("CRD"). In the Matter of the Arbitration Between Thomas A. Walker, Jr., Claimant, v. Edward Jones, Respondent (FINRA Arbitration Decision 18-04242)
http://www.finra.org/sites/default/files/aao_documents/18-04242.pdf
Respondent Edward Jones took no position on Claimant's expungement request, asserted various affirmative defenses, and participated in the hearing.
Although notified of the requested expungement and scheduled hearing, the customer did not participate in the hearing.
Expungement
In recommending expungement, the sole FINRA Arbitrator found that the customer's claim, allegation, or information is false. In an articulate explanation, the Arbitrator offers this rationale:
In late October or early November of 2017, Claimant met with the Customer for about 90 minutes while working for Respondent. Claimant recommended that the Customer rebalance his extensive portfolio to reduce risk and increase current income. The Customer agreed and the transactions were carried out on November 7 and November 9, 2017.All of these trades were placed in a "fee-based" account where the client could place unlimited trades for the same cost. Therefore, the Customer's sale of the securities did not result in additional commissions to Claimant. On December 5, 2017, Claimant left Respondent and joined LPL Financial. The Customer remained with Respondent, where he had been a client for 15 years.On December 11, 2017, Respondent received a communication from the Customer that he had changed his mind regarding the transactions made in November 7 and November 9, and wished for them to be reversed. The Customer used the phrase "did not authorize". The Customer did not make any other complaints about Claimant nor state in any way that Claimant had misled him.Respondent decided to cancel the trades in order to accommodate the Customer.The Customer was invited to participate in this proceeding. A letter was received from his wife, dated May 24, 2019. The Customer's wife had also been a client of Claimant. The Customer's wife presumably responded for her husband due to his age and medical condition, discussed further below. Critically important is that this letter states that both she and her husband fully support Claimant's request for expungement. She states that at no time did her husband intend to blame or file a complaint against Claimant.The Customer's wife goes on to explain that her husband, who was over 80 years old at the time of the meeting with Claimant, was shortly thereafter diagnosed with a medical condition which causes lethargy and confusion. The Customer's wife states that as a result of his condition, the Customer became unsure of whether he actually wished to continue with the trades and believed that he had a "window" of three to four weeks during which he could reverse the trades without penalty or adverse consequences. The Customer's wife emphasizes that she and her husband do not blame Claimant in any way and that they support Claimant's request for expungement.During the telephonic hearing in this matter, Claimant credibly testified that during his 90-minute meeting with the Customer he explained very carefully to the Customer why he recommended the trades, that the Customer fully understood what was being recommended and that the Customer authorized the trades. Claimant also stated that he saw no evidence at that time that the Customer was incapacitated in any way such that he might doubt the Customer's competence to authorize the trades.Based upon all of the above, the Arbitrator finds that there is overwhelmingly strong and convincing evidence that the trades were properly authorized. Therefore, the complaint, as listed on Claimant's BrokerCheck, is without merit and untrue. It is not to the public benefit that this complaint remain on Claimant's CRD records and the Arbitrator recommends that it be expunged.
Bill Singer's Comment
Compliments to sole FINRA Arbitrator Philip Aaron Tymon for providing us with the necessary content and context to appreciate his rationale for recommending expungement. A truly superior Decision!
Also, compliments to Claimant Walker's lawyer, Matthew Wolper, Esq., Wolper Law Firm, P.A. https://wolperlawfirm.com/about-us/matthew-wolper/ who seems to have gone the extra mile on behalf of his client. Given the circumstances presented in the FINRA Arbitration Decision, it was likely no minor effort to arrange for the letter from the customer's wife.