December 7 Deadline to Comment on New Expungement Proposal

With only 4% of customer complaints being expunged, FINRA is bowing to pressure, presumably from the customer attorneys' bar, to again make it more difficult to remove false claims from a broker's public record.

FINRA's recent proposed amendment seeks to make expungement an even more extraordinary remedy by preventing anyone found liable in a customer complaint case from even seeking it. The proposal would also require that customers who have submitted complaints or other professionals be invited to any hearing on expungement proposals; and it would prohibit the arbitration panels charged with granting or rejecting expungement requests from giving any "evidentiary weight" to a customer's failure to appear at a hearing.

https://www.financial-planning.com/news/brokers-comment-period-on-finra-expungement-proposal

CRD Expungement

The problems associated with FINRA‘s CRD Disclosure System are well known to financial professionals – the concept of disclosing every allegation, justified or not, against a registered person, to anyone who cared to ask, is unheard of in our system of justice. The addition of BrokerCheck, where the information is available to anyone with an Internet connection has made the situation intolerable.

For that reason, we are often asked to file an expungement request with FINRA, to remove unwarranted items from the CRD system, and I explain the process in a new article at the New York Securities Lawyer website.

The interests of investor protection overrode the concepts of fundamental fairness and due process for brokers, and today there is full disclosure of every wart, pimple and untrue allegation made against a broker. Not fair to the broker, but of a theoretical benefit to the investing public.

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Mark Astarita is a national known securities attorney and a partner in the securities law firm of Sallah Astarita & Cox, LLC. He can be reached by phone at 212-509-6544 or by email - mja@sallahlaw.com

FINRA Proposes New Expungement Procedures

FINRA seeks comment on establishing a roster of arbitrators with additional training and specific backgrounds or experience from which a panel would be selected to decide an associated person’s request for expungement of customer dispute information. The arbitrators from this roster would decide expungement requests where the underlying customer-initiated arbitration is not resolved on the merits or the associated person files a separate claim requesting expungement of customer dispute information. The Notice also proposes additional changes to the expungement process that would apply to all requests for expungement of customer dispute information.

This proposal is one in a series of regulatory initiatives that FINRA is considering related to the expungement process. For example, the FINRA Board of Governors has approved filing with the Securities and Exchange Commission (SEC) proposed amendments to the Codes of Arbitration Procedure for Customer and Industry Disputes (Codes) to make the best practices from the Notice to Arbitrators and Parties on Expanded Expungement Guidance (Guidance) rules that arbitrators must follow when considering expungement requests. In addition, FINRA staff has been working with the North American Securities Administrators Association (NASAA) on various expungement issues, including potential amendments to the existing regulatory review process.

The text of the proposed amendments can be found at www.finra.org/notices/17-42.

Comment Period Expires: February 5, 2018

Senator Pushes FINRA to Hurry Reviews of Fired Wells Fargo Brokers

Wells Fargo & Co. is facing increasing scrutiny from lawmakers over the potentially wrongful dismissals of financial advisers and other employees who pushed back on questionable practices during the bank's multiyear cross-selling scandal.

The latest salvo comes from Sen. Bob Casey (D., Pa.), who, in a letter Wednesday to the Financial Industry Regulatory Agency, the brokerage industry's self-regulatory body, asked for an expedited review process to determine whether any Wells Fargo employees were unfairly dismissed as retribution for speaking out or not cooperating with aggressive cross-selling tactics, according to the letter reviewed by The Wall Street Journal.

FINRA in response to an earlier inquiry from lawmakers, said that of the 5,300 employees fired during a five-year period, more than 600 from Wells Fargo's wealth-management division had received termination filings known as Form U5s. These forms chronicle the reasons for the dismissals of brokerage employees, and negative justifications can hinder an adviser from gaining employment elsewhere in the industry."

Senator Pushes Finra to Hurry Reviews of Fired Wells Fargo Brokers


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The attorneys of Sallah Astarita & Cox have decades of experience in representation of brokers in expungements and other  U4 and U5 issues. Call them at 212-509-6544 or send an email. for more information on correcting your CRD record

PNC Employee Wins U-5 Expungement and Damages

A former broker at PNC sued PNC for a dirty U-5, alleging defamation, libel, misconduct, wrongful termination, and wrongdoing in connection with the termination of his employment.

A FINRA arbitration panel awarded him over $100,000, plus attorneys fees, and ordered his U-5 amended to state that his termination was arbitrary and capricious.

A significant win for the broker. Remember - your CRD Record is forever, and public. You need to make sure it stays clean, and you need to take action to protect and correct it.

Thanks to Bill Singer for alerting use to this award - Defamed PNC Employee Wins Dramatic Expungement 

If you are registered with FINRA and believe that your firm has filed a false U5, call Sallah Astarita & Cox. Their attorneys have decades of experience in representing brokers and firms in employment matters, including U-5 defamation cases.

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