April 16, 2009
Florence Harmon
Deputy Secretary, Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Florence Harmon:
I am an insurance agent that takes pride in being able to help clients with their personal insurance needs. I work hard at developing trust and providing service to my clients. At times I have sent them to someone else who can better serve their needs. I am writing this to express definate concerns I have related to certain aspects of FINRA's proposal to revise Forms U4 and U5. Certain parts of the FINRA proposal are very appropriate, but my specific concern is with that part of the proposal that would revise Forms U4 and U5 to essentially 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. As I understand the wording now a person would have to report allegations of sales practice complaints made against that person as long as the person was either named in or could be identified from the body of the claim, even if the person is not a party to the lawsuit or arbitration proceeding.
I strongly object to this as a violation of my rights since in essence I would be considered "guilty before charged", and this could easily result in destroying all I have worked so hard to establish - my reputation and livelihood since unsubstantiated claims could be made in a proceeding in which I have not been named as a defendant or respondent. 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 unproven claims or allegations made in a lawsuit or arbitration proceeding in which the individual has not been named as a party. Furthermore, a named party to a lawsuit or arbitration has an opportunity to refute the allegations against him/her and "clear his/her name." Someone who has not been named as a party in a lawsuit or arbitration does not have this same opportunity or ability, and any allegations made against him will likely go unanswered and unchallenged. People generally do not take the time or effort to find out the facts but rely wholly on what they read or hear.
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,
Nancy A Dorsett