FINRA CRD Expungement Proposed Rule Change
On November 10, 2022, the SEC issued an order instituting proceedings to determine whether to approve or disapprove FINRA’s proposal, as modified by Amendment No. 1, to amend the Codes of Arbitration Procedure to modify the current process relating to the expungement of customer dispute information. See the SEC Notice of Order.
The proposed rule change would:
- require that a straight-in request be decided by a three-person panel that is randomply selected from a roster of experienced public arbitrators with enhanced expungement training;
- prohibit parties to a straight-in request from agreeing to fewer than three arbitrators to consider their expungement requests, from striking any of the selected arbitrators, from stipulating to an arbitrator’s removal, or from stipulating to the use of pre-selected arbitrators;
- provide notification to state securities regulators of all expungement requests and a mechanism for state securities regulators to attend and participate in expungement hearings in straight-in requests;
- impose time limits on filing of straight-in requests;
- codify and update the best practices in the Notice to Arbitrators and Parties on Expanded Expungement Guidance applicable to all expungement hearings, including amendments to establish additional requirements for expungement hearings, to facilitate customer attendance and participation in expungement hearings, and to codify the panel’s ability to request any evidence relevant to the expungement request;
- require the unanimous agreement of the panel to issue an award containing expungement relief;
- establish procedural requirements for filing expungement requests, including for on-behalf-of requests.
The proposed rule would also amend the Customer Code to specify procedures for requesting expungement of customer dispute information during simplified arbitrations.
Read more about FINRA CRD Expungement.
SR-FINRA-2022-024 Comment Letters
- James P. Galvin’s Second Comment Letter to FINRA’s Proposed Expungement Rule Changes – SR-FINRA-2022-024
- James P. Galvin’s Comment Letter to FINRA’s Proposed Expungement Rule Changes – SR-FINRA-2022-024
Request a Free Consultation with a FINRA CRD Expungement Attorney
If you are a registered representative with unfair disclosure items on your FINRA BrokerCheck Report that are hindering your ability to grow your practice or find another job in the financial services industry, and would like to find out about having the unfair disclosure removed through a FINRA CRD Expungement proceeding, then request a free consultation or call 1-800-405-5117 to speak with a FINRA CRD Expungement Attorney now. Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities regulation and compliance law practice. For more information on Galvin Legal, PLLC, please visit www.galvinlegal.com or call 1-800-405-5117.