By Stuart Sinai

Nothing can be more devastating to acquiring new clients and maintaining present ones than unwarranted customer complaints challenging an investment advisor’s honesty, treatment of clients, and reputation. A mere unverified letter from an investment advisor’s client (usually a former one), or even a complaining telephone call, to your broker-dealer firm results in that complaint being automatically listed on your Financial Industry Regulatory Authority PUBLICLY-AVAILABLE BrokerCheck Report.

Not only are the great majority of these complaints abandoned, never followed through, by the client, they are also often erroneous, or as a result of a mistaken assumption or a movement in an unstable market. Yet they can remain on these Reports indefinitely under present and proposed rules. These entries on the BrokerCheck Record become poisonous statements, create false innuendo, blemishes, adversely affecting a financial advisor’s most essential asset, reputation.

These entries provide competitors with ammunition to criticize, defame, ridicule to both present clients and potential new ones, implying the advisor lacks in trustworthiness, as being a scoundrel. These entries can stigmatize, “dog” for an entire career unless the advisor initiates expungement proceedings, to clear, purge them, from the record.

We have within the last 18 months, expunged 5 entries, and another 2 are being challenged in present arbitration proceedings. However, FINRA, presently in the process of making this process more difficult and costly, has proposed new rules that will likely go into effect this year substantially limiting your rights. Any advisor wishing to discuss issues feel free to call Stuart Sinai or Christopher Martella at our offices. One of us will get right back to you.


For further information regarding these matters, please contact Mr. Sinai at 248.740.5660 or via email.