Ron Carson Goes One-for-Two in Bid to Expunge Old Customer Complaints
Ronald L. Carson, Jr., whose wealth empire includes an eponymous $11.5 billion-asset firm and a sales coaching business, had mixed success this week in cleaning his regulatory record of client complaints.
The complaint, alleging unsuitable and over-concentrated positions in mutual funds, was ultimately withdrawn by the customer but remains in the Central Registration Depository and is summarized on Carson’s publicly available BrokerCheck record. Its lingering taint embodies a frequent complaint by brokers and their lawyers about the difficulties of cleaning up frivolous charges.
Carson, however, was turned down by the Finra regulator in his bid to clear disclosure of a 2002 customer complaint for “failure to carry out [an] investment plan.” The customer claimed $12 million and was awarded $50,000, according to BrokerCheck.
The expungement failed on technical grounds. The director of Finra’s Office of Dispute Resolution determined that a “prior adverse award” is ineligible for arbitration, arbitrator Philip J. Glick wrote in the award statement.
A Finra spokeswoman said she could not immediately comment on the reasoning of the dispute resolution director. Neither Carson nor his lawyer, Matthew E. Wolper in Plantation, Fla., returned calls for comment.
Carson, who since January has been registered solely as an RIA after dropping his affiliation with Cetera Advisor Networks, filed his expungement claims in February 2019, more than a decade after the underlying events allegedly occurred.
Glick ruled that the 2004 complaint can be expunged because it met Finra arbitration rule requirements of having been false and “factually impossible or clearly erroneous,” based on Carson’s testimony and sworn affidavit. Neither the customer nor LPL Financial, the respondent in the expungement complaint, objected to Carson’s requests or participated in the hearings.
Carson Wealth Management, his principal advisory firm, has a pending customer complaint filed in December 2018 before the American Arbitration Association, according to the advisor’s BrokerCheck record. It seeks at least $500,000 related to charges for direct investments and limited partnership interests,
Carson Wealth “improperly notified” a product sponsor that the customer was no longer a client, causing the sponsor to begin charging standard fees rather than the lower rate negotiated by the advisory firm. The client also alleges that Carson Wealth’s advisory fees were excessive, according to BrokerCheck.
Carson’s expungement request did not address the pending complaint.
Broker claims for expungement have been surging, provoking customer plaintiffs’ lawyers to release a study that says the process robs investors of important information about brokers.
Finra has proposed rule changes that would create panels of expungement arbitration experts and shorten the time limit for bringing requests to within one year of an arbitration award or filing of a customer complaint by a firm. Lawyers representing brokers have argued that the changes would be overly restrictive, even as they encourage clients to hurry to file claims under existing rules.
Finra closed comments on its proposed rule changes almost two years ago, but its staff has not filed them for approval with the Securities and Exchange Commission nor proposed revisions to the Finra board, a spokeswoman for the self-regulatory group said Wednesday.