April 8, 2009
THIS IS NOT JUST ANOTHER FORM LETTER!
I am writing to express my deep concerns about FINRA`s proposal to revise Forms U4 and U5. As is far too often the case, regulators proposing this kind of regulation have obviously never worked in this industry, and have absolutely no clue as to the impact of their ignorant actions. Not having the ability to respond to UNADJUDICATED ALLEGATIONS IS ABSURD. How would you like to have a felony, even a misdemeanor on your record because your neighbor accused you of something and you were not allowed to defend yourself? THIS IS EXACTLY WHAT THIS PROPOSAL DOES!
This proposal will undermine THE efforts of HONEST, LEGITIMATE Financial Advisors to build a successful business by allowing our reputations to be harmed by unproven allegations contained in an arbitration or civil litigation claim in which we are not a named party. THIS IS ABSOLUTELY UNACCEPTABLE, AND THE PEOPLE PROPOSING THIS SHOULD BE ASHAMED OF THEMSELVES. THEY SHOULD RESIGN, BECAUSE IT IS OBVIOUS THEY DON`T HAVE A CLUE ABOUT THE BUSINESS THEY ARE ATTEMPTING TO REGULATE.
As a simple matter of fairness, financial advisors should be allowed a meaningful opportunity to respond to unadjudicated allegations before having their reputation sullied through the reporting of these matters to the Central Registration Depository and made available to the public through FINRA`s BrokerCheck program. But under the proposal, "yes" answers to Questions 14I(4) and (5) on Form U4 and Questions 7E(4) and (5) on Form U5 would be reported to the public and securities regulators whether or not they have merit. I would not be surprised if, taken to court, this regulation would be deemed UNCONSTITUTIONAL.
I am aware that there are other situations under the current rules that require mere allegations contained in written customer complaints to be shared with the public and the regulators. However, I vigorously disagree with FINRA`s conclusion that this injustice should be extended to arbitrations and litigation that fail to name the financial advisor as a party. Instead, I believe FINRA should propose to end the reporting of all unsubstantiated claims of wrongdoing to the public and allow honest and decent financial advisors to retain their hard-earned reputations.
I request the names and mailing addresses of all those who are in favor of this ridiculous proposal, as I wish to communicate with them directly, and to pound some common sense into their thick skulls. Would you please send me those names and addresses?
Therefore, I urge you to reject FINRA`s proposal to add Questions 14I(4) and (5) to Form U4 and Questions 7E(4) and (5) to Form U5. Thank you for considering my comments.
Mr. John Morey
Raymond James Financial Services
823 N. 149th Street
Omaha NE 68154