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There Was Little She Could Do -- So Why Was This BOM's Record Marked Up?
October 20, 2021
At a bare minimum, we have the right to expect sufficient content and context in a FINRA Arbitration Award so as to render the published document intelligible. Frankly, that's not asking a lot. Unfortunately, there just doesn't seem to be quality review at FINRA once a final draft Award is presented for posting on the regulator's website. In a recent expungement arbitration, it's unclear what was expunged because we don't know what was said by an apparently unhappy customer; and, making things worse, it doesn't appear that the target of the customer's complaint had much, if anything, to do with the underlying transactions or purported losses.
Case in Point
In a FINRA Arbitration Statement of Claim filed in April 2021, associated person Claimant Misiti sought the expungement of an unsettled customer complaint from her Central Registration Depository record ("CRD"). FINRA member firm Respondent John Thomas Financial did not submit an Answer, enter an appearance, or participate in the hearing.
In the Matter of the Arbitration Between Michele Ann Misiti, Claimant, v. John Thomas Financial, Respondent (FINRA Arbitration Award 21-01123)
https://www.finra.org/sites/default/files/aao_documents/21-01123.pdf
https://www.finra.org/sites/default/files/aao_documents/21-01123.pdf
Although notified about the FINRA arbitration expungement hearing, the customer did not respond participate in the hearing.
The sole FINRA Arbitrator made a FINRA Rule 2080 finding that the customer's claim, allegation, or information is false. In recommending the expungement, the Arbitrator offered this rationale:
Bill Singer's CommentThe claim against Ms. Misiti was investigated and determined not to be factual. Claimant was not in a supervisory capacity at the time of the occurrence. Respondent's Chief Compliance Officer testified that someone else was the Branch Office Supervisor for the period of time that the customer sustained losses that led to the dispute. The Chief Compliance Officer testified further that after Claimant became the Branch Office Manager, there was little she could do to rectify the losses sustained by the customer.
According to online FINRA BrokerCheck disclosures as of October 15, 2021, Misiti was first registered in 1993 with Gruntal & Co. Incorporated, and has been with six other FINRA member firms since. During her March 2009 to July 2013 tenure at John Thomas Financial, BrokerCheck lists her "Position" as "Assistant Branch Manager."
As to the FINRA Award, frankly, I'm puzzled -- and that's not a good thing. The Award sort of loses me with the very first sentence in the above-quoted rationale: "The claim against Ms. Misiti was investigated and determined not to be factual." What claim? No claim is presented either in detail or in brief in the Award. What was investigated and found not to be factual? Why would you present such a finding in an Award yet not present the underlying predicate? The Award teases us with the revelation that the underlying customer complaint apparently involved "losses that led to the dispute," but fails to offer any content or context to said losses or dispute. Was Misiti a producing stockbroker or was she solely a manager or was she both? The mere fact that I'm forced to ask such questions renders these declarations in the rationale even more perplexing:
The claim against Ms. Misiti was investigated and determined not to be factual. Claimant was not in a supervisory capacity at the time of the occurrence. . . . after Claimant became the Branch Office Manager, there was little she could do to rectify the losses sustained by the customer.
Much is made in the Award that Misiti was "not in a supervisory capacity at the time of the occurrence." When was the time of the occurrence, and how are we to reconcile her purported lack of supervisory capacity with BrokerCheck's characterization of her role as "Assistant Branch Manager?"
Hmmmm, so --- was Misiti merely an "Assistant" Branch Manager as disclosed on BrokerCheck or was she the full-tilt, full-fledged "Branch Office Manager" as testified to by the Chief Compliance Officer as so stated in the Award? Which then takes us down another annoying path, where we wonder just how a BOM would be in a position where "there was little she could do to rectify the losses sustained by the customer." Assuming that Misiti had become the BOM sooner in terms of the developing losses, just what could she have done to rectify losses that she could not have done later on, when she became the BOM?
Given that John Thomas Financial investigated the underlying customer complaint and found it to be not factual, then just what the hell did the firm put on Misiti's CRD -- and, more to the point, why did it put anything on her record?