Scarinci Hollenbeck, LLC
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Author: Scarinci Hollenbeck, LLC
Date: December 13, 2022
The Firm
201-896-4100 info@sh-law.comUnder FINRA Rule 2080, broker-dealer firms, offices, and professionals in the securities industry can request customer disputes be expunged from FINRA’s public records. When reputation is so important to client trust and retention, expungement is a no-brainer. But FINRA has high standards of review and a limited appeals process to challenge decisions – you must make sure to take the right steps when approaching this process. This is especially true if you’re currently in the middle of an unresolved arbitration. Otherwise, your request for expungement could be denied, leaving the dispute on your firm’s record. So, what findings are required for FINRA expungement?
The SEC recently proposed new rule changes to the expungement process. An experienced securities lawyer can help you navigate this ever-changing arena of regulations.
FINRA’s expungement process is meant to balance three separate industry interests:
As a result, the agency considers expungement an extraordinary remedy to be allowed only if the expunged records hold no significant value for regulators or investors.
FINRA Rule 12805 details the process for filing a successful request for expungement of customer dispute information. This includes a recorded hearing session, a review of relevant settlement documents, and regulatory grounds for why expungement should be granted.
There are four reasons expungement may be granted under FINRA Rule 2080:
FINRA sets out different procedures for handling expungement based on whether the expungement orders are granted through an arbitration panel, an outside court, or a settlement reached either in or outside the arbitration process. For example:
An experienced FINRA litigation attorney will know how to properly handle these matters and set you up for the best possible chance at a successful resolution.
When filing an expungement request, you must keep FINRA’s industry interests in mind. Regulators are concerned with having accurate and relevant information on record. A good securities lawyer should be able to anticipate, address, and disarm any concerns that regulators may have about the possibility of your expungement threatening any of these interests.
What findings are required for FINRA expungement? FINRA expungement rules are strict and the process is thorough. Between 2015 and 2020, the agency only expunged 4% of all customer disputes entered into the Central Registration Depository (CRD). You want to do everything you can to fall into that 4%. Because expungement is granted in only a narrow band of cases, you must be able to present convincing evidence that shows you qualify for this type of relief. At Scarinci Hollenbeck, we can help. Click here to contact us now and discuss your options for FINRA expungement.
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