Financial Advisor Vindicated in Court

Dennis Evanosky

Edward Jones recently lost an arbitration case against an Alameda financial advisor. The St. Louis, Mo.-based brokerage firm fired Cliff Wingyin Shum in 2013, alleging that Shum provided incorrect information to Financial Industry Regulatory Authority, Inc. (FINRA), the organization that regulates brokerage firms and exchange markets.

Shum, who currently represents Girard Securities, turned to FINRA to resolve and seek damages for what he considered wrongful termination and defamation. He also asked FINRA to have Edward Jones expunge his BrokerCheck record. BrokerCheck allows an investor to see a broker’s or financial advisor’s employment history, certifications, licenses and any violations of the law.

According to BrokerCheck, Edward Jones alleged that Shum "admitted that a Nov. 1, 2011, written statement that he provided to FINRA contained inaccurate information."

In his BrokerCheck statement on the matter Shum stated that he "never provided inaccurate information to FINRA." He explained that the circumstances surrounding the alleged admission refer to a meeting he had with Edward Jones. He alleged that Edward Jones "grilled" him about certain information he had provided to FINRA. Shum stated that the information was "in fact accurate." He stated that he was set up "as a scapegoat to cover up a firm-wide practice that may not have been fully compliant with FINRA regulations."

The panel decided in Shum’s favor and ordered FINRA to revise Shum’s BrokerCheck record, replacing both the original reason for his termination and the response with this note: "A Nov. 1, 2011, written statement that he provided to FINRA contained inaccurate information. The submission of the inaccurate information may have been unintentional."

A Nov. 9 check of Shum’s BrokerCheck record showed that FINRA had not yet revised the information.

The panel ruled that Edward Jones must pay Shum a total of $23,900: $10,000 for defaming its former employee, $7,500 in monetary sanctions and $6,400 for attorney’s fees. Shum had asked for considerably more money, up to $2 million. Because Edward Jones ended up losing the arbitration, the firm must also pay $18,800 to cover the cost of the process.