Arbitrator Wipes Old Complaints from Record of ‘One of Florida’s Largest Brokers’
It’s not every day that an arbitrator writes in an award statement that a $12,500 payment from a broker to a client was “a relatively insignificant sum” given the advisor’s status as “one of the largest brokers in Florida.”
But that’s what arbitrator Carl Shechter wrote in partial explanation of his decision to remove two complaints more than 10 years old from the record of Sean M. Fetterman, an advisor with UBS in Boca Raton whose team now manages about $1.3 billion of customer assets, according to the broker.
The expungement award, posted on Finra’s arbitration award website Monday, comes as brokers and their lawyers are hustling to clean up Central Registration Depository records of complaints they consider frivolous in anticipation of amended Finra rules that will make expungement more difficult.
According to the arbitrator’s decision, and to Fetterman, the facts were highly favorable for the broker. The decision in the broker’s favor occurred even though one client took the unusual step of appearing at the expungement hearing “hoping to reopen her [underlying] case in order to obtain an additional settlement,” according to Shechter’s decision.
The other client, who received what the arbitrator characterized as a “nominal” $25,000 settlement in 2005, wrote a recantation letter in 2007 to Wachovia Securities expressing regret for complaining that Fetterman put too many sub-AAA-rated bonds into his portfolio. “He praised [Fetterman’s] professionalism and ethics, and recommended his son and daughter to Claimant and continued to be Claimant’s customer,” Shechter wrote, adding that the broker was a “highly credible witness.”
The 86-year-old woman who testified at the expungement hearing on November 12 had alleged in May 2008 that Fetterman failed to exercise a market order and persuaded her to stay in some real estate stocks that caused her to lose “substantial” principal. Fetterman countered with evidence in the underlying arbitration and in the expungement hearing that she had placed a limit order that expired and was a sophisticated and active trader, according to his BrokerCheck record.
Fetterman did not contribute to the underlying “nominal” settlement of $35,000 that the woman received a decade ago.
At the expungement hearing, the woman told Shechter that she “did not have a very good memory, yet she appeared to be quite familiar with many of the details of the portfolio” in her apparent attempt to reclaim more damages, the arbitrator wrote. He explained to her that “the only purpose of the hearing was to determine if this claim should be removed (expunged) from Claimant’s record,” he wrote.
Fetterman, who was represented by James Sallah of Sallah Astarita & Cox, said he believed his lawyer is also working his way through expungement of three other pre-2010 customer complaints on his record. Sallah did not immediately respond to a request for comment.
“We wanted justification, and we received it,” Fetterman said of the expungement decisions. “If you have an obvious situation where it’s the fault of the client, it’s worth [the time and money cost] to get through it.”
The arbitrator, he said, “was great and asked great questions,” though he conceded that Shechter’s characterization of the underlying settlement he contributed to was somewhat surprising. “Twenty-five thousand dollars is still a lot of money,” he said.
Fetterman joined UBS in May 2008 from Wachovia Securities and its predecessor firm Prudential Securities. He began his career as a registered representative in 1989 at FMS, Inc., according to his BrokerCheck record. His team includes his younger brother Adam, a third advisor and three sales associates, according to their UBS website.