If you’re a broker facing customer dispute information, you need expert help. At Bakhtiari & Harrison, we represent individuals seeking FINRA expungement. We help clear false claims from your record in the Central Registration Depository (CRD). Expungement can make a significant difference in your career.
Why Expungement is Important
Customer complaints about alleged investment-related sales practices can damage your record. These can include allegations of forgery, theft, misappropriation, or conversion of funds. If you believe the information is false or factually impossible, you can seek expungement.
The Expungement Process
To remove such information, you may need a court order or a confirmed arbitration award. This process involves an arbitration proceeding. An arbitrator panel determines the accuracy of the information and your involvement in the alleged misconduct. Successful expungement clears your record in the CRD.
Enhancements to the Expungement Process
FINRA has enhanced the expungement process with rules 12800, 12805, and 13805. These rules ensure that the process is fair and thorough.
- FINRA Rule 12800: This rule applies to simplified arbitration for claims of $50,000 or less. It allows for a single arbitrator to handle the expungement request.
- FINRA Rule 12805: This rule requires that arbitrators provide a written explanation for their decision to grant expungement. It ensures the decision is evidence-based and disproves the false information or broker misconduct.
- FINRA Rule 13805: This rule applies to requests for expungement that are not part of a customer-initiated arbitration. It outlines the procedures for handling these “straight-in” requests.
How Expungement Works Under Rule 12805
Rule 12805 applies to all requests to expunge customer dispute information from the CRD system. When a party requests expungement during a simplified arbitration, only specific sections of this rule apply. Here’s a detailed summary:
- Requesting Expungement When Named as a Respondent: An associated person named in a customer-initiated arbitration can request expungement during the arbitration. They must include the request in their answer or a separate pleading. If they do not request expungement during the arbitration, they cannot seek it later.
- Limitations: If a panel has already held a hearing on a customer dispute, the associated person cannot request expungement. Similarly, if a court has denied the request for the same information, the associated person cannot ask for expungement.
- Expungement Request Requirements: The expungement request must be included in a pleading and filed at least 60 days before the first scheduled hearing. The request must include the filing fee, the CRD number of the requester, each CRD occurrence number involved, the case name and docket number, and an explanation of any previous expungement requests and their outcomes.
- Panel Decision on Expungement Request: If the arbitration closes by award after a hearing, the panel will consider and decide the expungement request. If the arbitration closes without an award or without a hearing, the associated person can file a new claim under Rule 13805 against the brokerage firm.
How Expungement Works Under Rule 13805
Rule 13805 outlines the procedures for expungement requests that are not part of a customer-initiated arbitration, known as “straight-in” requests. Here’s a detailed summary:
- Filing a New Claim: An associated person can file a request for expungement as a new claim if the customer-initiated arbitration did not result in an award, or if the arbitration closed without a hearing. This must be done against the member firm at which the person was associated when the customer dispute arose.
- Limitations: An associated person cannot file a request for expungement if the request is barred because of a previous denial by a court or panel.
- Requirements for the Expungement Hearing: The panel must hold one or more separate recorded hearing sessions to consider the expungement request. The associated person must appear in person or by video conference. All customers involved in the dispute are entitled to attend and participate in the hearing, introduce evidence, and provide testimony.
- Panel Decision: To grant expungement, the panel must unanimously find that one or more of the following conditions are met:
- 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.
- The claim, allegation, or information is false.
- The panel must provide a written explanation of its findings and identify the evidence supporting the decision. The panel’s decision must be unanimous to issue an award containing expungement relief.
Our Expertise
Our FINRA expungement lawyers understand the intricate details of this process. We help you file a request for expungement during an arbitration proceeding. We ensure that the arbitration award includes necessary findings for expungement relief.
Common Issues We Handle
We handle cases involving:
- Alleged investment-related sales practice violations
- Customer complaints
- Sales practice violations such as forgery and theft
- Conversion of funds and misappropriation
How We Help
We assist in:
- Filing the expungement request
- Representing you in arbitration proceedings
- Securing an arbitration award with findings necessary for expungement
- Filing court confirmation for the expungement award
Benefits of Expungement
Removing unfounded allegations from your CRD record can:
- Restore your professional reputation
- Enhance your career prospects
- Remove barriers to employment within brokerage firms
Contact Us
For comprehensive guidance through the FINRA expungement process, trust Bakhtiari & Harrison. We have the experience to help you clear your record. Contact us at (310) 499-4732 for a free consultation.
Work with us to protect your rights and keep your professional record clear. Ensure that false information does not harm your career. Reach out to our skilled FINRA expungement lawyers today.