April 15, 2009
Florence Harmon
Deputy Secretary, Securities and Exchange Commission 100 F Street, NE Washington, DC 20549
Florence Harmon:
I am an insurance agent and financial advisor who has spent over 20 years providing valuable services to and looking out for the interests of my clients. I am writing to express the significant concerns I have regarding that part of the proposal that would revise Forms U4 and U5 to 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. I am all for effective regulation and view my compliance department as a partner not an opponent. I believe that effective oversight of sales practices strenghens our business, but to render a representative vunerable to hearsay and innuendo that could destroy their business isn't good for anyone. This kind of standard leaves representatives open to vindictive allegations that could be leveled to discredit or otherwise damage them, without repercussion to the accuser.
Therefore, I must strenuously oppose the imposition of this "guilty before charged" standard which could result in my reputation and livelihood being irreparably damaged by unsubstantiated claims made in a proceeding in which I have not been named as a defendant or respondent. While I strongly believe that people who engage in unscrupulous or misleading sales practices should be aggressively prosecuted and subject to appropriate and meaningful sanctions, the SEC should not allow someone's reputation to be irreparably damaged by unsubstantiated claims or allegations made in a lawsuit or arbitration proceeding in which the individual has not been named as a party. For someone to have their reputation damaged without the ability to have a hearing and offer rebuttal seems very unamerican to me and a violation of constutional guarantees of due process.
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. Thank you for considering my comments.
Sincerely,
Roger Gainer ChFC