ATLANTA — A Channel 2 Action News investigation finds a legal loophole some investment brokers are using to hide client complaints and even financial settlements from the public.
“You weren’t chasing some big return?” Channel 2 Consumer Investigator Justin Gray asked a Cobb County retired flight attendant.
“That’s not me. That’s not me,” Rebecca replied. She asked Channel 2 Investigates not to use her full name but wanted to share her full story to warn others.
Rebecca says she has lost between $600,000 and $700,000 of her retirement savings.
“I didn’t want to do anything aggressive. It’s a big shift when you retire because there is no paycheck coming in. So, you have to stop and evaluate,” she said.
Now her former broker, Kevin Lawrence Kelly with Cetera Wealth Services wants to delete what she says happened, from his public record.
“The result would be that the complaint would be erased, and no one would know about it,” Rebecca’s attorney Jason Doss said.
Kelly filed a statement of claim with FINRA, the Financial Industry Regulatory Authority. FINRA is the independent regulatory body that oversees and regulates registered brokers and broker dealers.
It also maintains a publicly searchable BrokerCheck site where anyone can research the record of a broker.
On BrokerCheck, you can see not just complaints, but also what happened with the complaint. In Kelly’s case, there are multiple six-figure settlements.
Rebecca is one of several people who filed similar official complaints with FINRA against Kelly for moving lots of their money into something called a structured note.
“I’m not a high-risk person. I don’t want to chase some weird, random structured note that nobody’s heard of,” Rebecca said.
“These are very complex and risky products,” said Doss.
“These financial advisors were recommending them to everybody, regardless of whether it was appropriate for them,” he continued.
But with his expungement request, Kelly is asking FINRA to make it look like half a dozen of those complaints never happened.
A case where the brokerage paid a $284,000 settlement Kelly now claims was “patently false.”
In another, the brokerage paid the customers a $625,000 settlement. But Kelly now says in his filing that “the accusations will be shown to be false, clearly erroneous or factually impossible.”
“I’m like, ‘Oh my gosh, not only are they doing this to me and to other people, they want to erase it,’” Rebecca said.
A study by the Public Investors Advocate Bar Association found that between 2019 and 2023 brokers successfully expunged more than 2,500 complaints.
That cleans up the broker records for any potential clients researching them.
“It makes the whole disclosure process meaningless if they’re not accurate,” Doss said.
“You think people should be able to see what happened to you?” Gray asked.
“Yes, because it’s accurate, correct information,” Rebecca responded.
She even has an audio recording of Kelly promising to make this right.
“If we need to help you be whole on that. We’ll do that,” he can be heard saying on the recording.
But his legal filing claims instead that her complaint “will not provide valuable information for knowledgeable decision making” for other potential investors.
“It’s devastating. You’re like, ‘How could that happen?’ That’s an awful lot of money. And then I find out it’s not just me,” Rebecca said.
Rebecca’s attorney filed an official legal dispute with FINRA and because of that, Kelly’s attorney filed a new document removing her from the expungement case.
But he’s still proceeding with the others.
Channel 2 Investigates reached out to both Kelly and Cetera and did not receive a response.
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