Thursday, June 3, 2021

Expungement Proposal Withdrawn

In a rare turn of events, FINRA has withdrawn its rule proposal for making reforms to the expungement process.  FINRA issued a statement after the withdrawal indicating that it would work with NASAA and other stakeholders to pursue "more fundamental changes to the expungement process."

The surprising development is a bit of a mixed bag.  While it's good that FINRA will be working to deliver a proposal addressing core problems with the existing expungement framework, the decision to withdraw the proposal leaves the status quo for the interim period.  Without a moratorium on expungements the process will continue to delete significant information about broker misconduct without any real adversarial scrutiny.  Hopefully, FINRA will move swiftly to propose some meaningful reform soon.

 

https://lawprofessors.typepad.com/business_law/2021/06/expungement-proposal-withdrawn.html

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