Craig Henry PLC wins $75,000 award for financial advisor in FINRA hearing

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Craig Henry PLC wins $75,000 award for financial advisor in FINRA hearing

Craig Henry is pleased to announce that it won a $75,000 award on behalf of its client, a former financial advisor for PNC Investments. The advisor was accused of falsifying company records and was terminated from PNCI. The alleged falsification occurred when the advisor reported that he met with two clients for an annual review of their accounts. PNCI asserted that it had investigated these two accounts and determined that the advisor had not completed the annual meeting.

PNCI reported the advisor’s termination to FINRA, an agency responsible for regulating the financial industry. PNCI is required to report the termination, but in the report, PNCI repeated the allegation that the advisor was terminated for falsification of company records. This statement was included on the advisor’s Form U5, a record maintained by FINRA, and prevented him from obtaining new employment.

We challenged PNCI through the FINRA arbitration process alleging that the statement was false and defamatory. Three arbitrators were selected to hear the case over two days. We called witnesses, including one of the two clients at issue, who testified that the meeting had occurred. In addition, we introduced written statements from both clients that also confirmed the meetings occurred. We were also able to discredit PNCI’s investigation through cross examination of their witnesses.

A panel of three arbitrators agreed that the statement was false and ordered it removed from the Form U5 and replaced with a statement that the advisor was terminated “without cause.” The panel further found that the statement was defamatory and ordered PNCI to pay the advisor $75,000 in compensatory damages. Finally, the arbitrators determined that PNCI should bear the full burden of the fees associated with the hearing and charged them nearly $6,000 in hearing costs.

We are pleased to have obtained this excellent outcome for our client. If you work in the financial industry and wish to dispute information on your Form U5, please contact us to discuss your situation and ways we can help.

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