Unnamed UBS Brokers Demand Expungement in FINRA Arbitration

June 2, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in April 2010, Claimant asserted causes of action including suitability, breach of fiduciary duty, fraud, and failure to supervise in connection with Claimant's investment in Blackstone private equity limited partnerships in her account. Claimant requested, among other relief, compensatory and punitive damages, interest at the legal rate from the date of purchase or reasonable market return; attorneys' fees;  rescission; and damages for undisclosed commissions and annual fees. In the Matter of the FINRA Arbitration Between Deborah Traficante, Claimant, vs. UBS Financial Services Inc. and James Leslie Lacey, Jr., Respondents, (FINRA Arbitration 10-01972, May 31, 2011).

Respondents generally denied the allegations, asserted various affirmative defenses, and sought the expungement of the Central Registration Depository ("CRD") records for:

  • Respondent  Lacey; and
  • non-parties Andrew Tenaglia ("Tenaglia"), Michael Connole ("Connole"), and Loren Neumann.

Settlement But Not All Settled

On or about April 11, 2011, Claimant notified FINRA Dispute Resolution that the parties reached a settlement agreement. Therefore, the Panel made no determination with respect to Claimant's claims against Respondents.

At this point, Respondent UBS sought expungement of the CRD records of non-parties Tenaglia and Connole, but did did not reiterate its request for expungement relief on behalf of Respondent Lacey or on behalf of non-party Neumann. As such, the Panel made no determination regarding Respondent Lacey and non-party Neumann's expungement requests.

SIDE BAR: Why were the expungement requests withdrawn for Lacey and Neumann?  Dunno. Why don't I know? Because the FINRA Arbitration doesn't explain. Who the hell is Neumann? Ditto - no idea whatsoever. As always, FINRA Arbitration decisions don't always offer such details - and, yes, after all these years of complaining about that, I still find it infuriating.

The FINRA Arbitration Panel conducted a recorded, telephonic hearing on May 16, 2011 so the parties could present oral argument on the appropriateness of non-parties Tenaglia and Connole's requests for expungement. Claimant did not oppose the expungement requests and voluntarily opted not to appear at the hearing.


The  FINRA Arbitration Panel recommended the expungement of all references to arbitration from non-parties Tenaglia and Connole's CRD records, pursuant to Notice to Members 04-16: Expungement.

The Panel concluded that during the relevant times, registered persons Tenaglia and Connole were registered investment advisors and supervisors with Respondent UBS and they were not involved in any of the alleged investment-related sales practice violations that formed the basis of Claimant's complaint. Tenaglia and Connole were not named parties in the original action but merely approved the Investor Application Forms.

The FINRA Arbitration Panel found that expungement of Tenaglia and Connole's records was appropriate, in part, because of those non-parties' very limited and innocuous involvement in this matter. In addition, Claimant did not oppose Petitioners' petition for expungement.

Also see:

Unnamed FINRA Arbitration Respondent Seeks Vindication (Street Sweeper, January 27, 2011)

Unnamed FINRA Arbitration Respondent Wins Expungement - What?? (BrokeAndBroker.com, November 17, 2010)

UBS FINRA Expungement: Good news and bad news for unnamed stockbroker (BrokeAndBroker.com, February 23, 2011)