Untangling a U5 Reporting Error, Client Gets Termination Disclosure Expunged

May 29th 2023

by Owen Harnett

Summary of Keypoints

  • HLBS Law successfully obtained expungement of a termination disclosure for a financial advisor following a reporting error related to a bank merger and an internal dispute that led to the advisor’s termination.
  • The termination was not initially reported by the former employer, causing the advisor’s new employer to report it to FINRA, which created confusion and made it appear the advisor had been terminated by the new firm.
  • Although the new employer had no concerns about the advisor’s conduct, the inaccurate reporting resulted in complications with FINRA and the advisor’s BrokerCheck record.
  • Senior Attorney Chelsea Bauer worked with the advisor, the new employer, and FINRA over a two-year period to untangle the reporting issue.
  • The termination disclosure was ultimately expunged from FINRA’s Central Registration Depository and removed from the advisor’s BrokerCheck record.

Recently at HLBS Law, our attorneys obtained a win for a financial advisor seeking expungement over a termination dispute. This client was a financial advisor for a well-known bank when there was a merger happening within the bank. Due to an internal dispute in the process of the merger, client was terminated. The client knew they were wrongfully terminated and fortunately they were able to find employment quickly with a new bank..

As Client transitioned to the new bank, the client encountered some trouble with FINRA because of the termination disclosure. Terminations are supposed to be disclosed to FINRA by the reporting firm. Client’s most recent employer had reported the termination to FINRA because it had not been reported by the previous employer. This led to some legal confusion with FINRA, and the client’s records made it appear that the client was terminated by their current employer. The current employer had no concerns with the financial advisor and knew the reasons behind their former termination. 

Fortunately, the new employer was willing to assist their employee in helping them get their name cleared after hiring HLBS Law. After 2 years of hard work, senior attorney Chelsea Bauer was able to work with the new employer and FINRA to successfully get the termination dispute expunged from FINRA’s Central Registration Department’s records, thus removing the disclosure from client’s BrokerCheck.



Photo by: Maksym Kaharlytskyi

Owen Harnett
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