Expungement is the process by which information is removed or erased from one's record. Although this term is often associated with "dismissals" on criminal accounts, it can also be applied to forms used in the financial industry.
Under FINRA Rule 2080, when a customer complaint is reported on Forms U4 or U5, member firms or their associated persons may dispute the complaint and request to have the information expunged through the arbitration process.
In addition, if a disclosure is made on a Form U4 which is materially inaccurate, the associated person can seek to have that expunged from their BrokerCheck.
Requirements For Expungement
FINRA considers expungement an extraordinary remedy. Before the expungement can be granted, arbitrators must make an affirmative finding that one or more of the three standards set forth in Rule 2080 have been met. As discussed in our Risk Management Tips, these three standards are:
- The claim, allegation or information is factually impossible or clearly erroneous;
- The registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation or conversion of funds; or
- The claim, allegation or information is false.
If at least one of the above standards has been met, then the arbitration process can continue.
Our Expungement Services
For those individuals who need legal guidance or assistance with their FINRA expungement case, Jacko Law Group, PC. can help. Our legal services include:
- Determining if expungement is applicable per FINRA's requirements
- Initiating arbitration proceeding through FINRA Dispute Resolution
- Helping prepare testimony for expungement hearing
- Reviewing settlement documents
- Filing a Separate Action, including filing an in-court Petition to Confirm the Arbitrators' Award
Contact us to consult with one of our experienced attorneys to discuss your expungement needs: 619.298.2880.