| July 8
July 8 A U.S. judge threw out a lawsuit against
the Financial Industry Regulatory Authority (FINRA) by a former
broker who alleged that disclosures on the regulator's public
database violated his privacy rights.
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. [ID:
nL1N0LU1EP] 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)