Securities Lawyers Blog
Recently, Steven Orr’s (Orr) attorney reached out to our firm to inform us our posts on Orr was inaccurate. The post detailed that Orr had been subject to five customer complaints concerning allegations of securities law violations including unsuitable investments and misrepresentations among other claims. Many of the complaints involve direct participation products (DPPs) and private placements including oil and gas partnerships, non-traded real estate investment trusts (REITs), and other alternative investments.
Orr’s attorney has brought it to our attention that Orr has succeeded in using The Financial Industry Regulatory Authority (FINRA) flawed expungement process system to remove all five complaints from his BrokerCheck record. As shown in Orr’s expungement “award”, Orr sued his own employer, H. Beck, Inc. (H. Beck) for damages of $1.00 due to the placement on his record of five customer complaints. The “hearing” that took place appears to have been perfunctory at best. The hearing concerning five customer complaints took only one hearing session to complete. Usually there are two hearing sessions a day – meaning in this case five cases were probably decided in time for the arbitrator to catch lunch. The total cost to Mr. Orr by FINRA to expunge five customer complaints from his record was $100 – excluding any fees he privately paid his counsel.
During this less than four hour hearing to decide five cases, H. Beck did not contest the request for expungement. In FINRA expungement cases, brokerage firms like H. Beck profit from being sued by their own brokers to clean their records. Of the five investors that complained concerning Orr’s investment recommendations – four of which resulted in documented settlements and compensation for the victims – none of the investors participated in the short hearing. Only one investor submitted a letter to the arbitrator opposing expungement. In sum, there was no meaningful opposition to Orr’s expungement request.
Without any significant opposition, the arbitrator found that there was “credible evidence presented demonstrated that Claimant made suitable recommendations to each of the Customers, fully and accurately representing the recommended investments including, but not limited to, any associated risks.” Further, “public disclosure of the false and clearly erroneous allegations made by the Customers does not offer any public protection and has no regulatory value.” In other words, the arbitrator found that Orr was the subject of lies by five of his clients – all of which astonishingly appear to have told the same or similar lie concerning Orr’s investment advice. From the record, it appears the arbitrator made this determination without ever speaking to a single client.