Understanding FINRA Expungement: A Crucial Step for Financial Professionals

IntroductionIn the highly regulated financial industry, maintaining a clean record is essential for professionals such as financial advisors, brokers, and registered investment advisors. However, disputes, customer complaints, and regulatory actions can sometimes unfairly tarnish an individual’s professional record. This is where FINRA expungement plays a crucial role.

What is FINRA Expungement?

FINRA (Financial Industry Regulatory Authority) expungement is a legal process through which financial professionals can remove inaccurate, misleading, or false information from their Central Registration Depository (CRD) and BrokerCheck records. Given that BrokerCheck is a publicly accessible database used by investors, having negative marks—whether justified or not—can severely impact a professional’s career and reputation.

Why is FINRA Expungement Important?

• Protects Reputation – Financial professionals rely on their credibility, and unjustified disclosures can harm their ability to attract and retain clients.

• Employment Opportunities – Firms consider a candidate’s CRD history before hiring, and adverse records can limit career prospects.

• Regulatory Compliance – Ensuring that only accurate and fair information remains on a professional’s record upholds the integrity of the financial industry.

Grounds for FINRA Expungement

Not every dispute or complaint qualifies for expungement. FINRA Rule 2080 sets specific criteria for when expungement is appropriate, including:

• The claim or allegation was factually impossible or clearly erroneous.

• The financial professional was not involved in the alleged violation.

• The claim or allegation is false or lacks a reasonable basis.

The FINRA Expungement Process

The expungement process involves several steps:

1. Filing a Request – The individual must request expungement through FINRA arbitration or a court order.

2. Arbitration Hearing – If granted, an arbitration panel reviews the case and determines if expungement is warranted.

3. FINRA and Court Approval – Even if the arbitration panel approves, a court must confirm the expungement before FINRA removes the record.

How Bakhtiari & Harrison Can Help

Bakhtiari & Harrison is a distinguished AV-rated law firm specializing in securities arbitration and litigation. With expertise in FINRA arbitration, AAA arbitration, and regulatory matters, the firm represents financial professionals in expungement cases. Their legal team helps clients navigate the complexities of the expungement process, ensuring that only accurate and fair information remains on their records.

Conclusion

FINRA expungement is a critical tool for financial professionals seeking to protect their reputation and career. Given the legal complexities, working with experienced attorneys like those at Bakhtiari & Harrison can significantly improve the chances of a successful outcome. If you believe an unfair complaint is damaging your professional record, consulting with a skilled securities arbitration lawyer is the first step toward clearing your name.