Metropolitan News-Enterprise


Tuesday, July 7, 2015


Page 3


Wealth Advisor Loses Bid to Have Complaints Wiped From Database

Judge Linfield Says Plaintiff Failed to Show That Allegations Against Him Were Baseless


By a MetNews Staff Writer


A Los Angeles Superior Court judge has turned down a request that he order expungement from an online database of seven customer complaints against a Miami wealth advisor who insists the allegations are baseless.

The plaintiff says they’re without merit, Judge Michael P. Linfield observed, but failed to prove that.

The jurist’s 28-page decision sets forth that the complaints against plaintiff Michael Dwyer, made between 2001 and 2009, are contained in the Central Registration Depository (“CRD”)—a computer database maintained by the Financial Industry Regulatory Authority, Inc. (“FINRA”)—and are accessible via FINRA’s website, BrokerCheck. FINRA is termed a “private, self-regulatory organization registered with the [Securities Exchange Commission] as a national securities association,” regulated by the SEC.

Linfield’s decision describes Dwyer in these words:

“Plaintiff Dwyer has been a broker for more than 20 years. He has worked at Merrill Lynch since 1993 and is currently the Managing Director of Wealth Management at Merrill Lynch. Mr. Dwyer has repeatedly been recognized as one of the top 100 financial advisors in the nation….He is in the top 0.01% of all brokers, managing a portfolio of over $2.5 billion in assets.”

Inherent Powers

The decision recites that Dwyer is asking that the court exercise its inherent powers to order that the complaints be removed from the database. It says that a FINRA rule authorizes a broker to seek a court order for expungement, and that FINRA “recognizes that expungement should occur ‘when the expunged information has no meaningful regulatory or investor protection value.’ ”

In balancing the equities, Linfield points to a consideration noted at oral argument by the California Department of Business, which intervened in the case. It stressed that stripping complaints from the database would not only result in denial of public access to them, but also their availability to regulators.

The decision quotes an SEC order last year as containing this comment:

 “When information is expunged from the CRD, it is no longer available to regulators, broker-dealers, or the investing public. Both regulators and the investing public are disadvantaged when factual information is removed from the CRD.”

Dwyer’s Contention

Linfield’s decision sets forth:

“Plaintiff’s argument is premised on the assumption that the seven complaints against Dwyer are ‘meritless.’ At least 127 times throughout his trial and rebuttal briefs, Plaintiffs’ counsel labels the complaints against Dwyer as ‘meritless’ or ‘baseless.’ However, plaintiff has offered absolutely no evidence that the seven complaints against Plaintiff Dwyer were baseless or meritless, let alone ‘clearly erroneous’ or ‘wholly frivolous.’ ”

This analogy is offered:

“In considering Plaintiff Dwyer’s request for expungement, the Court cannot help but think of the more than 38,000 people who are arrested each day in the United States….Many of the people arrested are never charged with a crime. Yet their arrest records are public. The situation of Plaintiff Dwyer is analogous to that of an extremely rich person—perhaps someone in the public eye—who goes to court to request that the record of his seven arrests, dating from 4 to 10 years ago, be expunged. There are certainly good arguments that could be made that stale arrest records—or records of arrests where no charges were ever filed—should be expunged. Yet that is not the law. In order for an arrest record to be expunged, the plaintiff bears the extremely high burden of proving factual innocence.”

‘No Evidence’

The decision acknowledges that Linfield did not bear that same burden, but says that the burden that is imposed upon him was not met, concluding:

“All of the evidence before this court shows that the information concerning Plaintiff Dwyer contained on the CRD or displayed on BrokerCheck is accurate. As indicated on BrokerCheck, there have been seven customer complaints filed against Plaintiff Dwyer. Plaintiff Dwyer has presented no evidence to show that any of these complaints are false, inaccurate, meritless or frivolous. Plaintiff Dwyer has presented no evidence that he has been damaged by disclosure of these complaints on BrokerCheck. In short, Plaintiff Dwyer has presented no convincing reason for this Court to use its equitable power to expunge his record.

“Conversely, the disclosure of accurate customer dispute information is most definitely in the public interest.

“This is not a close case. The equities weigh heavily against expungement of Plaintiff Dwyer’s record.”

Linfield’s opinion was filed June 30 but was not made available until yesterday.

‘John Doe’

Dwyer brought the action on Jan. 31, 2013, as ‘John Doe,’ with no effort by FINRA or the state to challenge the propriety of his litigating under a pseudonym. However, after Linfield ruled last April 29 that references in the record to Dwyer by his true name need not be redacted, the plaintiff sought a writ in the Court of Appeal to secure total anonymity.

In denying an immediate stay of trial court proceedings, Presiding Justice Paul Turner of this district’s Div. Five commented that “the petition to proceed anonymously is meritless as no overriding interest is present.”

Dwyer did not pursue his quest for a writ, and the petition was dismissed.

After Linfield took the request for expungement under submission on June 4, the defendant and the intervenor moved to have the caption changed from “Doe v. FINRA to “Dwyer v. FINRA,” attaching copies of two MetNews columns in which the plaintiff’s identity is disclosed, and arguing that continued use of a false name has been rendered pointless.

That motion is slated to be heard Aug. 4.

Jeffrey Riffer of the Century City law firm of Elkins Kalt Weintraub Reuben Gartsinde LLP is Dwyer’s attorney. Ethan Dettmer of Gibson, Dunn, & Crutcher LLP’s San Francisco office represents FINRA, and Adam Wright is arguing for the Department of Business Oversight.


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