A FINRA Arbitration Decision to Make You Vomit.

March 5, 2008

In The Matter of Margaret C. Lyon (Claimant)
AND Merrill Lynch, Pierce, Fenner & Smith Incorporated (Respondent) (FINRA Dispute Resolution # 07-02992, March 4, 2008)
, Lyon alleged that erroneous language had been recorded by Merrill Lynch on her Uniform Termination Notice for Securities Industry Registration ("Form U5") dated August 16, 2007
and sought $1,000 in damages. Merrill acknowledged that a clerical error was
made on Claimant's Form U5 and consented to its correction.

The parties entered into an agreement to present to the Arbitrator a Stipulated Award, which was granted. The Arbitrator denied any monetary damages but ordered that Lyon's U5 be amended to show that the:

[R]eason for Termination in Section 3 of "Other" be changed to "Voluntary" and that the date of termination reflect August 10, 2007. The Arbitrator further orders that the termination comment of "Reduction in Staff' be expunged from her CRD record.

All's well that end's well? No, not quite. . .not by a long stretch. Claimant has not received a self-executing expungement. No, to the contrary, she must now go to court and get the award confirmed. Last I looked, no lawyer will do that for free, and if Claimant attempts the court filing on her own, she may well fail to handle the matter competently enough for
the court's satisfaction and incur further delay and frustration.

Lyon was victimized by Merrill's clerical error. Instead of having a "clean" U5 that indicated she voluntarily quit, her industry record was marked with an eyebrow-raising notation of "Other." Moreover, rather than it appear that she voluntarily quit,her employer suggested that she was laid off. All in all, minor discrepancies but in these tough times such quirks often cost job applicants a job.

If you will permit what I think is a much deserved diatribe, what idiots-be they regulators or customers' lawyers-think this outcome is fair by any stretch of the imagination? Lyon is denied a lousy $1,000 award but is now expected to go to court and obtain an expungement. And why must she endure that ordeal? Was there a customer complaint involved here? NO! Was the employer some boiler-room seeking to cover-up employee misconduct? NO!!

Oh, and one last thing. To add incredible insult to injury, FINRA retained Claimant's $50 filing fee.

This is exactly the kind of crap that makes you want to vomit in disgust. Is there no one left in regulation with a heart? Has commonsense become such a rare commodity that regulators cannot see the utter stupidity of this miscarriage of justice? Would it kill FINRA to provide for a modest fund to compensate industry employees who are required to leave the confines of arbitration and venture into the court system in order to expunge erroneous information from their records?

READ THIS LETTER AND REPLY CONCERNING THIS CASE: http://www.rrbdlaw.com/brokeandbroker/index.php?a=blog&id=35).