Lance Belline of Fayetteville felt blindsided when his business partner of 23 years announced in May 2023 that he was leaving their firm to start another one. But he claims the the former partner’s actions in the following months nearly wrecked Belline’s career as a financial adviser.
Belline says the ex-partner made comments to clients about Belline possibly overcharging them to lure the clients to a new firm. Then followed a chain of events that led to Belline’s disputed firing from Equitable Advisors LLC of New York City, a company he had worked for since 1994. Eleven customers also had lodged complaints against him.
Clients “asked Lance about their fees,” said Belline’s attorney, Peter Lindholm of AdvisorLaw of Broomfield, Colorado. “And because Lance, being the good guy that he is, said, ‘Hey, you weren’t overcharged. Here’s your contract. But if you feel you are, I will make it right,’” Lindholm said. “And because of that, it launched this kind of death spiral.”
But last month, a Financial Industry Regulatory Authority arbitration panel, after a three-day hearing, expunged the complaints against Belline.
The panel found that “after the split, the former partner was making various negative comments about [Belline] to [his] customers in an effort to solicit them to come to his new firm,” the finding said.
The finding did not name the former partner, but Belline identified him as Travis Riggs, who split with Belline in 2023 to join a new firm, Natural State Wealth Advisors of Bentonville.
But Riggs, in response to questions from Arkansas Business, denied making negative comments to former clients about Belline.
“We were very intentional and worked diligently to communicate to clients that we were inviting them to something new, not trying to pull them away from anything,” Riggs said via email. “Our message focused on the higher level of service and tax planning we believed Natural State Wealth Advisors would provide.”
He said regulators contacted him several times and asked him to testify at Belline’s arbitration hearing, but he declined. “Had I accepted the request, the panel would have heard that this never happened,” he said. The panel also found that the allegations against Belline were false.
Belline also won a FINRA award, or finding, in 2024 that revised the reason he left Equitable in October 2023 from “terminated” to “voluntary.”
“The Arbitrator recommends expungement based on the defamatory nature of the information,” the panel said in its finding.
In a statement to Arkansas Business, Equitable said that it “takes all client concerns seriously, conducts thorough investigations and takes appropriate action in accordance with applicable regulatory reporting requirements. We stand by all decisions the company made in connection with this matter.”
Lindholm said what happened in Belline’s case isn’t really unusual. “It’s a very cutthroat industry. It’s very competitive, and people and firms will do whatever they can to maintain their book of business,” he said.
He also said Belline’s case highlights the complications that can arise when a customer lodges a complaint to a broker-dealer. The broker-dealer then has an obligation to report the complaint to FINRA. Those complaints are then made public on an adviser’s BrokerCheck report.
“Because a dispute shows up on FINRA’s BrokerCheck does not mean it’s accurate,” Lindholm said. “It just means that it was made, that a complaint was launched, and that’s it.”
Any written consumer complaint that FINRA receives that alleges a registered representative was involved in one or more sales practice violations within the last two years and alleges damages of $5,000 or more is posted on the representative’s BrokerCheck, FINRA’s online portal that allows people to check a broker’s employment history, certifications and any violations. Brokers can provide comments on the allegation in BrokerCheck.
Belline said he spent more than $250,000 in legal fees to clear his name, allowing him to return to his career as a financial adviser. “I feel very fortunate that I’m able to withstand the storm that I have,” he said.
Exiting the Firm
Belline said that in May 2023 Riggs announced that he was leaving Belline’s firm, Lighthouse Financial of Rogers, to start a new company with a junior associate, Daniel Wright.
“I made the decision because I saw an opportunity to launch a new firm with someone who shares my passion for delivering the highest level of service,” Wright said in an email to Arkansas Business. “Natural State Wealth Advisors gives us the ability to provide comprehensive financial and tax planning in the way we believe clients deserve.”
Riggs said he left because “I no longer believed it was the best place for my clients.”
But when Belline heard the news of them leaving, he said it “created a lot of emotion for me.”
He also said that Riggs, who is a certified public accountant, said his plan was to get 65% of Lighthouse’s joint clients.
But Riggs said that claim isn’t true. “I consistently expressed my hope that the transition could be amicable,” Riggs said. “When Mr. Wright and I exited, we communicated a desire to handle the separation professionally and work through a fair division of business.”
But Belline said that when Riggs contacted the former clients, he told them that they were being overcharged.
Some of the customers quizzed Belline about the fees. He said that he told the clients that they were being charged correctly.
Belline said he then voluntarily reimbursed the customers, if they felt they were being overcharged.
Belline “admitted that it was a mistake going backward, but he wanted to assure everyone that he was always treating them fairly at a time when his former partner was spreading negative information about him,” the January finding from FINRA said.
The amounts of the settlements involving the clients who expressed concerns about the fees associated with their accounts ranged from about $16,000 to $100,000, according to the files on BrokerCheck.
Riggs said that Equitable mailed a letter to all of Belline’s clients and encouraged them to review their statements to determine if they were billed accurately.
“If a client asked me about their fees, I gave the same encouragement as Equitable — to review their statements,” Riggs said. “We did not have access to any financial information as the result of us separating from Equitable.”
But then Riggs called Equitable’s compliance officer and said that Belline was “settling customer complaints away from the Firm,” the finding said. (Riggs said that he declined to testify at the hearing, “so my perspective was never considered.”) For a broker to settle a complaint without informing the firm is typically a violation of the firm’s policies and procedures.
Belline said that in the broker-dealer industry, “companies don’t like that being done, because I could be settling away something that was wrong, which wasn’t the case.”
Equitable’s compliance officer asked Belline if he had settled the cases, and he said he had.
In October 2023, Belline was terminated from Equitable. Belline is the founder and partner of Lighthouse Financial, which was an entity in Equitable’s platform. Lighthouse cut ties with Equitable in November 2023. Belline said his partners Dax Weindorf, Grant Smith and Ben Fuller helped him “weather the storm” and transition the firm to Waterloo Capital RIA, a registered investment adviser, and Fidelity Advisors of Boston, which holds the customers’ securities.
“And then I spent two years [of] my life just on the sidelines,” Belline said. “And year one was completed with us getting a wrongful termination off my record from Equitable.”
Then he fought to remove the customer complaints.
Panel Findings
But in the hearing involving the customer complaints, the Arkansas Securities Department opposed Belline. As a result of recent FINRA arbitration rule changes, states are now allowed to participate in expungement hearings, and the ASD did.
The rule change was designed to make removing complaints more difficult.
“For many, many years, there were arbitrators who were rubber-stamping the expungement,” said Michael C. Bixby, founder of Bixby Law PLLC in Pensacola, Florida. Bixby is president of the Public Investors Advocate Bar Association.
“When you have, like, a 90% win rate, I think that’s about all you need to know.”
He said the expungement rate now is just under 70%.
The ASD said in response to questions from Arkansas Business that registered brokers and investment advisers are required to disclose customer dispute information in the Central Registration Depository system, which is operated by FINRA. FINRA supports the licensing and registration filing requirements of the U.S. securities industry and its federal and state regulators.
“The Department participated in this hearing as a non-party to protect the integrity of the information in the CRD,” said Amber Crouch, general counsel for the ASD.
Lindholm, Belline’s attorney, said that “we tried to lay out the facts” about the allegations of overcharging and the settlements. “We laid everything out, and [the ASD] kept trying to argue that [Belline] technically did pay them, which means there were concerns about fees.”
But he said that there was no evidence that Belline overcharged anyone.
“In fact, it was pretty much established that he charged everyone … underneath what the contract stated,” Lindholm said.
The FINRA panel said that it “saw no evidence that [Belline] had ever charged the customers in excess of their contracts with him.”
Crouch said that the hearing is subject to confidentiality restrictions and she couldn’t comment on it.
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