FinanciallyRegulated occasionally interviews interesting people in the financial industry. Interviewees must be experienced in their field, must offer keen insight into the regulation of Wall Street, and must be entirely fictitious.
This week, FinanciallyRegulated spoke with a broker charged in 1989 with “Unlawful Congress with an Office Apparatus.” He wants the charge removed from his BrokerCheck, the report FINRA makes publicly available to help investors evaluate financial advisors. BrokerChecks contain customer complaints and lawsuits, regulatory actions, employment terminations and criminal matters — including, apparently, 23-year-old charges.
FinanciallyRegulated: Good afternoon, thanks for speaking with us. . . You know, I’m afraid I don’t see your name here. Apologies, but what is your name?
I’d rather not say.
Oh, okay, fair enough, where do you work?
I’d rather not say that either. Look, if I gave my name and firm it would be too easy for millions of your readers to look me up on BrokerCheck.
Oh, they don’t need your name to do that. The can just search for “unlawful congress” and bam! There you are. Piece of cake, really.
Shut up!
Sorry, I’ll make sure we don’t publish my last remark.
Thanks.
No problem.
Because it’s very embarrassing for me.
I understand, no worries. So, the charge was in 1989?
Yeah, but it was dismissed. I never confessed to nothing.
What kind of apparatus was it?
Hypothetically?
Uh, yeah, hypothetically.
It was a Bloomberg terminal.
Really? A Bloomberg terminal?
What can I say, It was the 80s.
I miss the 80s. Anyway, was there really a criminal statute on the books prohibiting congress with an office apparatus?
Oh boy, don’t even get me started. No, there was not. That’s just the turn of phrase the wise-guy prosecutor used on the charging document. The actual statute he cited prohibited lewd behavior or something. When the compliance guy at my prior employer filled out my application for registration, you know, my Form U4, he checked the yes box for any felony charges, and then for the description, he copied verbatim the prosecutor’s sarcastic description of the charges. It’s been with me ever since. I’m trying to get references to this charge removed from BrokerCheck.
Have you consulted with an attorney?
Yeah, I told him I thought I was alone on that confusing night in 1989. He said I may be stuck with it on my BrokerCheck . . .
I don’t think you are supposed to share conversations you had with your attorney.
Oh yeah, he told me that too.
You did it again.
Oops! Don’t publish those remarks either, okay?
No problem.
Thanks.
Okay, so anyway, why is an old charge like this required to be on your BrokerCheck?
I’m told it provides investors useful information in selecting financial advisors.
How is it useful for an investor to know about this 23-year old charge?
I don’t know. Maybe there was a risk, you know, of erroneous order entry or something. But it doesn’t matter. It only matters that it was a felony charge.
Was there a risk of erroneous order entry on that confusing night in 1989?
Yeah probably. I mean, there could have been. Hypothetically.
There is a certain appeal. . .
Are you kidding? The other brokers won’t leave it alone. They thought it was funny to blame me for the 2010 “flash crash.” Now they are blaming me for the increase in rapid-fire, high-frequency trading.
That’s cold. Have any investors asked you about it?
Not a one. They don’t seem to read BrokerCheck.
That could be changing. Did you see the FINRA proposal to require direct links to BrokerCheck reports on financial advisor websites?
Terrific. Maybe I should just open a cupcake shop.
I think we have too many now. What about Rule 8312(e) which allows FINRA to remove inaccurate information. Can’t you claim it’s inaccurate?
Nope.
Wait, so is it true?
No! It’s not true! I mean, well, yes it is true — true that I was charged with felony unlawful congress with an apparatus.
I see, so you want it changed to what, lewd conduct?
No. I don’t see that as an improvement. I want it removed entirely.
Well if you didn’t actually do the crime, isn’t the information inaccurate?
It doesn’t seem to matter whether I was innocent or not under Rule 8312(e), just that I was charged.
Strange. But were you actually innocent? Come on, you can tell us.
I’ll take the fourth on that.
The fourth?
Yeah, you know, I have the right to remain silent if I can’t afford an attorney and whatnot.
Come to think of it, are you sure it was actually a felony charge?
Yeah. Well . . . gosh. I’m not sure who determined it was a felony. Maybe I should look that up.
What about FINRA Rule 2080? Doesn’t that allow you to seek expungement in a court?
I don’t know. That rule talks about expunging customer dispute information, so I don’t know if that would work on an old criminal charge. I’ll ask my lawyer.
So what can you do?
I’m still checking it out. There was a recent case in California that might be helpful, I understand. In that case, the court said it was not bound by FINRA’s suggested standards of when expungement is proper. Instead, the court said that it had, uh, let’s see, how did it put it, oh yeah, I remember: the court has inherent equitable powers to weigh the equities favoring expungement against the detriment to the public should expungement be granted.
Wow, you have a good memory for judicial rulings. So have you kept a clean record since?
Yeah, my record is otherwise clean.
No more Bloomberg terminal incidents?
Well, none on my BrokerCheck.
