market selloff headline

market selloff headline

Friday, February 28, 2014

Former Broker Who Agreed to SRO Discipline Now Wants Privacy and Sues SRO

Alan Mark Santos-Buch (CRD# 1534115) seems to want a judicial search engine "scrub" to remove online references to a FINRA (then-NASD) disciplinary action resulting in an "AWC" (Acceptance, Waiver and Consent) to resolve the matter with a censure, $10K fine and 30-day suspension from the industry.  The AWC included the determination that Mr. Santos-Buch "consented to the described sanctions and to the entry of findings that he signed and delivered to a public customer a memorandum that stated that the customer’s account would be guaranteed against losses."  Of course it is impermissible for brokers to induce unsuspecting customers with guarantees against market losses, but Santos-Buch did not admit or deny any violations.

Santos-Buch walked away from the securities business the year before the AWC was issued and sanctions against him levied, and the Norwalk, Connecticut brokerage (Moran & Assocs. – CRD# 19378) that once employed him no longer exists.  Santos-Buch apparently perceives the AWC, which he signed voluntarily to avoid further SRO disciplinary proceedings against him, as something of an unfair "scarlet letter" and maintains that when FINRA informs the investing public of his disciplinary record it violates his privacy rights and thwarts his employment prospects.  His apparent strategy to recapture his pre-disciplinary record privacy was to initiate litigation against FINRA in the United States District Court for the Southern District of New York to prevent the SRO from disclosing the disciplinary proceedings summary about him, such as the periodic report found here.

FINRA often supports its use of the BrokerCheck disclosure system as a means to inform the investing public of former brokers who flee the industry and later set up shop as investment advisers, financial planners, and the like, with newfound access to customer investment funds.  Incidentally, it seems Santos-Buch did just that in the 90s, creating the Greenwich-based Santos-Buch Investment Advisers, Inc., a Delaware corporation, according to public records.

Santos-Buch filed his case (no. 2014-cv-651) earlier this month, which is now pending before the Hon. Shira A. Scheindlin, captioned Santos-Buch v. Financial Industry Regulatory Authority.

Read more at Reuters, Ex-Broker tries to use privacy lawsuit to clean up record.

UPDATE: FINRA maintains it should receive "absolute immunity" for its regulatory activities. Read the Law360 report here.