Expungement by FINRA Arbitrators

The Public Investors Arbitration Bar Association released a study asserting that FINRA's arbitrators were too willing to permit the expungement of complaints against a firm or representative in connection with the settlement of a customer's claims. Following the PIBA study, FINRA released a statement that was generally supportive of PIABA's concerns. FINRA noted that it has recently provided expanded guidance to assist arbitrators in the proper performance of their responsibilities with expungement and to enhance arbitrator training. FINRA stated that it is reviewing rules and interpretations, and considering changes to provide clarity as to what actions in connection with conditions on settlement violate FINRA's rules.

See: PIABA Study: Stockbroker Arbitration (available to PIABA members only); FINRA Statement; FINRA Guidance.Related news: FINRA Files Proposed Rule Change to Amend Form U4 (August 14, 2013).