Ex-Merrill Broker Wins Expungement of Termination Notice After 2019 Move to Stifel
A Financial Industry Regulatory Authority arbitrator last week granted a 34-year industry veteran expungement from his record references to an “employment separation after allegations” of conduct including discretionary trading in a client’s account, and an underlying claim his former firm settled in 2019.
Merrill, the respondent in the Finra case, had settled for $19,503 the underlying 2019-filed claim, and asked the sole arbitrator to deny Elman’s request.
The arbitrator, Michael L. Fortney, recommended expungement based on the lack of evidence presented by the complaining party in the underlying claim, according to a Finra award letter finalized on July 7.
“The customer complaint related to a family dispute regarding control of the Customer’s assets by her adult children. Despite the complaint by the Customer’s adult daughter, there was no evidence that [Elman] acted inappropriately or in any manner that would justify the complaint,” the letter states.
“Merrill fought hard to oppose this expungement” but “ultimately, the truth of the matter came out,” said Brandon Taaffe, an associate lawyer in the Sarasota, Florida office of Shumaker, Loop & Kendrick, who represents Elman, who is now a senior vice president and investment portfolio manager for Stifel. Elman, who referred all questions for this story to Taaffe, was “vindicated,” the lawyer said.
A Merrill spokesperson declined to comment for this story.
Elman’s written comments on BrokerCheck noted that the client had approved the “profitable” trade in question and that issues arose only in 2019, two years after the purchase. In April 2020, Merrill “closed its review finding the allegations to be without merit,” informed Finra it couldn’t substantiate the allegation, and made no finding of improper solicitation, Elman wrote in his comments.
“Even though the original allegation was without merit, after I left the firm, Merrill Lynch decided to refund all 2019 advisory fees on all of the Client’s unrelated accounts in an effort to retain the business,” Elman said in the comments.
Elman began in the industry at Banc One in 1986 and moved the next year to Lehman Brothers, which he left in 1993 to spend 15 years at Citigroup Global Markets, prior to moving to Merrill in 2009, according to his BrokerCheck record.
Elman’s victory did not come on the cheap. The arbitrator wrote that Elman should pay the $2,250 fees for the two sessions–one in April and the other in June–that his request took to reach a conclusion. Those costs will be added to his attorney fees, and any likely future legal expenses he will incur to have the underlying customer claim expungement award confirmed by a court, as Finra requires. But Finra, upon Elman’s request, will, without a court order, remove from his record the reference to separation after allegations, Taaffe said.