Expungement may be requested in both customer and intra-industry cases. If the case was filed by a customer or is an intra-industry case that requests expungement of customer dispute information, the panel must follow Rule 2080 and comply with Rule 12805 or Rule 13805.
If the claim is between a FINRA member firm and a current or former associated person, and the panel recommends the expungement of information not related to a customer dispute from the Central Registration Depository (“CRD”), the expungement recommendation may be based on the defamatory nature of the information in the CRD system. If the panel does not base its expungement recommendation on the defamatory nature of the information, FINRA will require the requesting party to obtain court confirmation of the award before executing the expungement recommendation.
The arbitrator must make an affirmative finding that the subject matter of the claim or the information in the CRD system meets one or more of the three standards, set forth in Rule 2080:
- The claim, allegation, or information is factually impossible or clearly erroneous.This standard, for example, would provide a basis for expungement for an individual who was named in an arbitration claim but was not employed or associated with the member firm during the relevant time.
- The registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds.This is an objective standard based on CRD reporting requirements. This standard would require an affirmative arbitral finding that the registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds. Under this standard, dismissal of a claim, by itself, would not be a sufficient basis for ordering expungement.
- The claim, allegation, or information is false.Under this standard, the adjudicator will assess the evidence in the case, make an affirmative finding that the claim, allegation, or information is false, and order expungement relief.
- Initial phone call with My RIA Lawyer to discuss legal strategy
- Legal team is assigned, information is gathered, and Statement of Claim is prepared and submitted to FINRA
- We communicate with the broker-dealer to ensure cooperation
- We communicate with the investor in original underlying customer complaint to ensure cooperation and advise on how to respond to FINRA’s notification to them
- We select the arbitration panel by thoroughly vetting each arbitrator’s background]
- We request documents, affidavits, and other evidence
- We conduct all pre-hearing conferences
- We attend the arbitration hearing
- We file a motion in state court to confirm FINRA’s expungement
- We present the state court’s grant of motion to FINRA
- We ensure your U4 is properly expunged