What Happens After You Submit a FINRA Expungement Waiver Request?

If you have an inaccurate or defamatory customer dispute on your firm’s FINRA Central Registration Depository (CRD) record, you can ask the agency for expungement. But what happens after you submit a FINRA expungement waiver request?

finra expungement waiver

Under FINRA’s policies, expungement is an “extraordinary remedy” that’s appropriate in only limited cases. In order to successfully win expungement, you must prove the facts of your case and follow strict agency procedures. In our recent blog series, we went over FINRA’s proposed new changes to the requirements for expungement under Rule 2080.

To get a CRD record expunged, FINRA Rule 2080 requires that you:

  • Get a court order (in state or federal court) either confirming or directing an expungement that was awarded as part of a settlement or arbitration, and
  • Name FINRA in the court proceedings and serve them all the appropriate documents.

You must fulfill the above requirements unless you get a waiver. A waiver can help streamline this process, save you time, and get your expungement faster.

The FINRA Waiver Request Process

To waive the requirements under Rule 2080, you must submit a waiver request to FINRA with all of the relevant court and legal documents. Your waiver request should include the statement of claim on your case, the answer to the claim, any settlement agreement or arbitration awards, and any other documents that may be relevant to your case.

What are these “relevant documents”? Essentially, for FINRA to accept a waiver in place of a court order, you must be able to prove to the agency that whatever process you went through to get your expungement can pass FINRA’s own standards under Rule 2080.

The process of applying for a FINRA expungement waiver involves the following steps:

  1. You email FINRA a waiver request with all of the relevant documentation.
  2. FINRA notifies the state where you operate with a copy of your waiver request.
  3. FINRA reviews the information provided to see if the expungement awarded in the settlement or arbitration passes the agency’s standards and rules – specifically the rules under the Arbitration Code and Rule 2080.
  4. FINRA sends you a written response either granting or denying your waiver request.

To successfully get a waiver, you must be able to prove one of the following:

  • The information in the customer dispute is clearly erroneous or impossible,
  • You were never involved in the alleged misconduct, fraud, or violation,
  • The claim, allegation, or information contained within the record is false, or
  • Your expungement is based on a finding of defamation.

FINRA as an agency is most concerned with maintaining a record of accurate information that’s fair to all industry players and in the best interests of the public. As much as a customer dispute on your record affects you, it’s not all about you. An attorney who understands FINRA’s policies will know how to present a case with all of these considerations in mind.

What Happens After FINRA Reviews Your Waiver Request?

If your waiver request gets denied, you can still move forward by naming FINRA in a court proceeding to confirm the expungement. The process may take you a little longer without a waiver, but you can still get a successful expungement of the inaccurate customer dispute.

Your lawyer can put together the most convincing case possible by making sure your waiver request checks all the right boxes and meets FINRA’s regulatory and political goals. To help set you up for success from the beginning, a good attorney will have FINRA’s waiver requirements in mind throughout the arbitration or settlement negotiation process.

In the world of securities, your reputation is everything. Clients must be able to trust their broker-dealer firms. Expungement can clear your public FINRA record of inaccurate information that would otherwise sully your name. Click here to contact the experienced Warren Law team now about your options for FINRA customer dispute expungement.

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Jon-Jorge Aras

Jon-Jorge Aras, Partner, Chair of Securities Litigation