Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, April 17, 2012

FINRA Proposes Expungement Procedures for Unnamed Brokers

FINRA is requesting comment on proposed new rules that would permit brokers who are the “subject of” allegations of sales practice violations made in arbitration claims, but who are not named as parties to the arbitration, to seek expungement relief by initiating  In re expungement proceedings at the conclusion of the underlying customer-initiated arbitration case. These allegations must be reported in the same way that customer complaints are reported—to the Central Registration Depository (CRD®) system on Forms U4 or U5. Currently, the Code of Arbitration Procedure for Customer Disputes (Customer Code) and the Code of Arbitration Procedure for Industry Disputes (Industry Code) (together, Codes) do not provide unnamed persons with express procedures to seek expungement of these types of allegations. 

According to FINRA, the proposed In re expungement rules and accompanying forms provide unnamed persons with a remedy to seek redress concerning allegations that could impact their livelihoods, yet maintain the protections of FINRA’s expungement rules to ensure the integrity of the CRD records, on which the investing public relies.

The Comment Period expires May 12, 2012.

Other Regulatory Action, Securities Arbitration | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference FINRA Proposes Expungement Procedures for Unnamed Brokers:


Post a comment