Judge Dismisses Ex-Broker’s Privacy Claim Against Regulatory Website
The former broker, Alan Santos-Buch, sued FINRA, Wall Street’s industry-funded regulator in February, alleging it continues to make details of a 1997 disciplinary case against him available on its website and in a regulatory document. That makes it difficult for him to find jobs, he alleged.
Santos-Buch wanted the court to order that FINRA erase the black mark on his record.
But Santos-Buch failed to raise “substantial constitutional questions” that would allow his case to proceed in federal court, according to an opinion released late Tuesday by the U.S. District Court in Manhattan.
Instead, Santos-Buch should have challenged FINRA’s rules using another procedure available through the U.S. Securities and Exchange Commission, wrote Judge Shira Scheindlin.
An attorney for Santos-Buch, Paul McMenamin, said he plans to appeal, saying the ruling ignored the “strong and credible” constitutional claims raised.
A FINRA spokeswoman declined to comment.
The case hinged on an unusual legal argument to address what many brokers say is a problem: They settled disciplinary cases with FINRA before a 2010 rule that makes details about those actions permanently available to the public on FINRA’s BrokerCheck database. Investors can use the free online service to research brokers’ professional histories.
“Santos-Buch has failed to allege any facts establishing that irreparable injury may occur without immediate judicial relief,” Judge Scheindlin wrote in the 21-page opinion.
Santos-Buch, who worked for a now-defunct firm in Connecticut, had agreed to a $10,000 fine and 30-day suspension in 1997 to settle charges that he had signed and sent a document that guaranteed a customer’s account against losses, a violation of industry rules.
Santos-Buch, who had left the securities business the year before he was formally suspended, neither admitted nor denied the allegations. He now works in the energy industry.
(Reporting by Suzanne Barlyn; Editing by Jonathan Oatis)