The Expungement Process
Whether you are new to the financial industry or a seasoned financial advisor, a negative mark or complaint on a regulatory report can have a detrimental impact on your career. With respect to customer complaints, a FINRA (Financial Industry Regulatory Authority) regulated brokerage firm is required to report complaints without regard to the merits. This essentially allows potentially false information to become public record unless and until the financial advisor challenges the complaint. A financial advisor expungement lawyer is familiar with the expungement process. Hence, they know the necessary steps needed to remove an unjustified complaint from your record if the need arises. In order to contest an unwarranted mark or complaint, a financial advisor must file a petition for expungement with FINRA and attend an arbitration.
FINRA’s Expungement Guidelines
FINRA provides specific guidelines and procedures for its arbitrators regarding expungement. These procedures “ensure that expungement occurs only when the arbitrators find and document one of the narrow grounds.” This is specified in FINRA Rule 2080:
- the claim, allegation or information is factually impossible or clearly erroneous;
- the registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds; or
- the claim, allegation, or information is false.
The Future of the Expungement Process
FINRA further cautions its arbitrators that expungement is to be an extraordinary remedy. Nevertheless, a financial advisor expungement lawyer experienced in assessing the record(s) at hand can help determine the likelihood of success on a petition for expungement. If the record is expunged, it is permanently deleted. It is no longer available to the investing public, regulators, or prospective employers.
Looking forward, FINRA has proposed plans to change the expungement process. One such change is to only use arbitrators with enhanced training and experience to hear expungement arbitrations. FINRA also proposed changing the timeframe a financial advisor can seek expungement, and requiring unanimous consent to grant expungement. FINRA released the proposed changes in 2017. They will likely undergo at least some changes before formal submission to the SEC. Whatever the future holds, an experienced financial advisor expungement lawyer is familiar with FINRA rules and regulations regarding expungement and can advise a financial advisor throughout the process.
Rogge Dunn Group’s FINRA arbitration attorneys have extensive experience handling expungement arbitrations. The lawyers at Rogge Dunn Group have represented more than a dozen of Barron’s national top 100 financial advisors. Furthermore, one of the firm’s partners, Joshua Iacuone, is a licensed FINRA arbitrator. For more information about our work for financial advisors, click here. To contact an attorney at Rogge Dunn Group, click here.