FINRA Expresses Concerns Regarding Expungement Process

FINRA recently released a statement highlighting its concerns about the current expungement process, with reforms expected to come this year. FINRA addressed its concerns regarding expungement reform in 2020 after submitting a plan to create a roster of specially trained arbitrators; however, FINRA withdrew this request last year. 

New York City, USA, Sign on the building of Financial Industry Regulatory Authority, or Finra, in Manhattan NYC lower financial district downtown

According to FINRA, the new proposal will be very similar to the original framework proposed in 2020, citing the “straight-in” problem as its primary concern, intimating that when a complaining client is not involved, the broker’s request is essentially unopposed.

Christopher Warren, Managing Partner at Warren Law Group states, “FINRA is ignoring the elephant in the room when it comes to broker expungements, and this is yet another example of the tail wagging the dog at FINRA. The problem is not that customers don’t get involved; the problem is that large wirehouse firms use U5 disclosures and razor-thin ‘complaints’ to discharge brokers for attenuated reasons, or sometimes for no reason at all. For example, WLG has successfully expunged multiple ‘consumer’ matters this year where the panel found that the customer complaint was not genuine and that the disclosures themselves were defamatory. In our experience, customers do not get involved in FINRA expungements because they never wanted the broker terminated in the first place. FINRA’s proposal ignores the undeniable (but unspoken) fact that large wirehouses weaponize U5 disclosures for-profit and business advantage in the marketplace.”

If you need to have your FINRA record expunged, you must seek legal counsel experienced in FINRA expungements and arbitrations. Contact the attorneys at Warren Law Group at (866) 954-7687 to schedule your consultation today.

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Christopher D. Warren

Christopher D. Warren, Managing Partner