FINRA Withdraws Expungement Reform Proposal It Had Prepared for SEC Approval

Posted on June 7th, 2021 at 12:08 PM
FINRA Withdraws Expungement Reform Proposal It Had Prepared for SEC Approval

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Financial Industry Regulatory Authority (FINRA) announced that it has temporarily withdrawn a proposal to reform financial advisor expungement procedures. According to FINRA, the agency withdrew the proposal after “consultations with the SEC staff” as the federal agency was prepared to vote on the plan. The withdrawal occurred ten days after the Public Investor Advocate Bar Association (PIABA) published a report questioning the proposed reforms and recommending that the SEC vote to deny the proposal. 

However, FINRA announced that it is not satisfied by the withdrawal. It stated, “We continue to take meaningful steps to enhance controls on the existing expungement process in the near term, including our specialized panels proposal, while we work concurrently to support the development of fundamental, multi-stakeholder solutions.” In the past fifteen months, PIABA calculated that advisors have had arbitrators grant requests to expunge customer complaints from their public records at a 90% success rate. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccelston, FINRA, expungement, sec

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