Did you take good notes in your contact management system on every conversation you had with him? If so, you should be ok.

I had a similar situation. Client that one of my brokers ( i was a producing asst mgr) said didnt fit their model and offered to do a split if i would manage the money and the relationship. Like an idiot i said yes. He did shit and totally disregarded my advice. He was an attorney for a securities firm (not a securities attorney, a contract attorney) and claimed that i told him preferreds were like money markets .

One day about a month after we (me and my branch manager) denied his claim, i was contacted by my wirehouses outside counsel. They told me that they offered the client $5000 to settle  (without consulting me) and he refused. They wanted to know if i thought they should raise their settlement offer. I went ballistic, and told them they obviously didnt read my notes that i submitted to Corporate Compliance. And that he should read the notes and then tell me what he thinks we should do. I also told him that if he offered them one penny i would sue his ass and my broker dealer. He called me two days later and said he agreed with me. The guy went away and never filed arbitration. I knew he wouldn;t because he was too cheap to pay the fees.

BUT - To your point, it went on my U-4. I think that since its a suitability complaint, its a sales practice complaint not a service complaint and its reportable. If he goes to arbitration, and you have good notes, you shold have no problem defending it. Although i know its not what you want to be bothered doing. Good luck and let us know how it turns out.

But i think that the distinction doesn't matter as far as whether its a reportable complaint. I think it would matter a great deal in the event of an arbitration.

I think as far as whether its reportable on your u-4, i think it depends on 2 things 

1. Are you named specifically in the letter. If not, then the right manager would interpret it as a complaint against the firm, not the broker (if he goes to arbitration, then his scumbag lawyer will take you and everyone else into it)

2. Is your manager willing to protect you and fight with corporate complaince on your behalf to get them to feel comfortable not reporting it on your U-4 (maybe on the u-4 of the guy you inherited it from?)

I really hope this works out in your favor, i know how aggravating a bogus complaint can be. Please keep us posted. I also hope Wet Blanket, our resident compliance "genius"  weighs in on this. I would consider his opinion before mine.

 

You:  Sell these bonds, they suck, I would've never recommended you buy them.

 

Him:  No fucking way dude!

 

You:  Seriously sell them.

 

Him:  Don't tell me what to do, I'm not fucking selling them!

 

Bonds drop in value...

 

Him:  I want my money back you asshole.

 

You:  I can't, you know that.  You should've listened.

 

Him:  Call 1-800-sueyourbroker.  I'll fix you!

 

Your B/D:  No, we aren't giving you anything, this is on you.

 

FINRA:  Don't forget, this is reportable to the public FOREVER on the internet and on your disclosure for advisory accounts! 

 

You:  But I didn't do anything?

 

Your B/D:  Yeah, he didn't do anything...

 

FINRA:  TOO BAD SUCKAZ!!! HAHAHAHAHHAHAHAHAHAHAHA!!!!

This, i agree with

Which means any referral or prospect of the original poster, or me, or thousands of others who have done nothing wrong except maybe take on new client that they shouldn't have taken on, will go to brokercheck and get scared off.

Its amazing to me that FINRA either doesn't care about that, or has not thought it through. They cannot possibly be oblivious to all the bogus claims made by investors that simply made a bad decision and now 'want their money back". 

Isn't there any way for us to organize and bring this to someones attention and get some relief? Such bullshit.

You would be surprised. There are a lot of people who hire an advisor but like to be involved or at least educated, about the markets and the investment world. Even if they are idiots, those people read Kiplingers and other bullshit publications, some of them watch Suzie Orman on Dyke TV, and other stuff like it. Those people ALL know about brokercheck.

This^^^. But the operative words are "for now". I don't think they've let go of the idea of overseeing RIAs. There was an article in Investment News last week about how RIAs are getting away with all kinds of shit, and have a very high rate of being non compliant, because SEC and states just dont have the resources to do as "good" a job as FINRA in oversight and regulating all of them.

A note...think partly about actually responding to the claim, but think more importantly about what anyone reading it will think. There is no restriction on what you say in your response.

yup, that was worth it.