Do you trust your securities broker? If you’ve invested your retirement accounts, life savings or
business funds with your broker, the answer is an obvious ‘yes’. And maybe your trust is well-founded
a) the broker works for a reputed financial institution
b) you have done all your background checks and the broker’s public records are clean
But securities fraud lawyer, Timothy J. O’Connor cautions investors – securities brokers can wipe complaints
and even legal claims off their public records. Here is evidence of this:
• May 24th, 2013 – According to The NY Times, FINRA (Financial Industry Regulatory Authority) of arbitrators
granted broker Michele Kief’s (from Wells Fargo, WFC) request to delete a securities complaint (in which the
bank settled for $125,000 allegations of fraud and negligence related to her actions). The complaint was
completely taken off her records. In addition, FINRA agreed to note that the investments in question were
‘suitable and safe’.
• In February 2013 – FINRA arbitrators consented to and recommended the deletion of a securities arbitration
complaint against ex-Charles Schwab (SCHW) executive, Kimon P. Daifotis. This was in spite of the complaint
being the eighth such allegation against Daifotis, who ran the Schwab Yield Plus fund which resulted in
investors losing hundreds of millions of dollars.
Security fraud lawyers and investment fraud attorneys in Albany, NY
can help explain the complexity of this situation—although FINRA is the responsible authority in place to
advise investors to check a broker’s record via BrokerCheck (FINRA’s regulatory database), FINRA arbitrators
can also wipe that same record clean if requested to do so.
So what does this mean for you as a securities investor? Comments from a securities fraud lawyer:
• In most cases, before setting up an account, a broker insists that clients agree to surrender the right to
file a legal complaint in court.
This means that brokerage firms and their employees don’t, and won’t have to contend with having a court
record. Therefore, any allegations such as the ones above can be resolved in private without legal
• So the only place where an investor can find a record of securities allegations against a broker is
BrokerCheck. This includes client complaints, criminal histories, bankruptcies, liens, regulatory actions,
An investment fraud attorney can help ensure you know your legal rights should your securities broker invest
your funds in a negligent or fraudulent manner.
To protect your investments, contact securities fraud lawyer Timothy J. O’Connor or visit our
website. For more information, please call Stockbroker Law at 518-426-7700 and ask for a FREE CONSULTATION today.
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