April 16, 2009
Deputy Secretary, Securities and Exchange Commission 100 F Street, NE Washington, DC 20549
I have been in the life insurance business for 23 years and the securities business for 15 years. I object to FINRA's proposal that Forms U4 and U5 require the reporting of allegations of sales practice violations made against a registered person that are contained in the body of an arbitration claim or lawsuit, even if the person is not a party to the lawsuit or arbitration proceeding.
Although I have never had a customer complaint filed against me or any of my partners with any state or federal jurisdiction or any insurer or broker-dealer, I realize that in today's litigious world, I could be named with scores or hundreds of other agents or registered representatives in a class action proceeding against an insurer. As I understand FINRA's proposal, I would have to disclose that listing (assuming I even knew about it) on my U-4.
A named party to a lawsuit or arbitration has an opportunity to refute the allegations against her. Someone who has not been named as a party in a lawsuit or arbitration does not have this same opportunity, and any allegations made against her will go unchallenged.
I therefore request that you not approve that part of FINRA's proposal that would require the reporting of allegations of sales practice violations made against a registered person that are contained in the body of an arbitration claim or lawsuit in which that person is not named as a party.
William B. (Blake) Woodard