Successful Expungement of a “Concern” Mistaken for a “Complaint”

Summary of Keypoints

• HLBS Law successfully obtained expungement for a financial advisor after a “concern” raised by a customer was mistakenly reported as an official complaint on the advisor’s CRD and BrokerCheck records.
• The disclosure originated from an email in which the customer expressed concerns that were promptly addressed and resolved, but the advisor’s firm automatically flagged and reported the message as a complaint due to internal software.
• Attorney William Bean handled the case, which began in October 2022, and worked directly with the customer, who confirmed the email was never intended to be a formal complaint and cooperated in the expungement effort.
• Despite customer cooperation, FINRA opposed the expungement and required additional information and follow-up, extending the process over several months.
• Ultimately, the disclosure was officially removed in April, highlighting how inaccurate reporting and automated systems can create unnecessary records, and how persistence and client relationships can impact expungement outcomes.

One of our attorneys, William Bean handled a case that started in October of 2022 and finally came to an end this April. A financial advisor, M.W., came to HLBS Law  to get a customer complaint expunged from his CRD record. The Central Registration Depository is how FINRA keeps track of all disclosures on financial advisors’ records. Denied customer dispute cases are relatively straightforward cases. However, this case was a bit more complicated because the original complaint from the customer was not technically an official complaint.

One of M.W.’s customers had sent an email to him, simply expressing some concerns and asking M.W. to address those concerns. He did in fact address his client’s concerns and they resolved the issue. Despite their conversation, M.W.’s firm has computer software that flagged the original message as a “complaint” and automatically reported it to his CRD record with FINRA. 

While our attorney, Mr. Bean was helping M.W. seek expungement, and based on the uniqueness of this case, the decision was made to contact the customer. The customer worked with HLBS Law and was  willing to help get the complaint removed. The customer explained that the email was not meant to be an official complaint by any means. He was happy to help HLBS Law get the complaint removed from M.W.’s record. However, even with the cooperation of the customer, FINRA was still opposing expungement, requiring more information and calls. After several months of persistence, Mr. Bean was successful in getting the complaint officially removed from M.W.’s BrokerCheck record. This is a great example of how maintaining a good relationship with a customer can help in future expungement actions.

Photo by: Trent Erwin