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Expungement

Maintaining a pristine reputation in the securities industry is paramount, especially today when licensed broker and Investment Advisor records are readily accessible through FINRA’s BrokerCheck and the SEC website. Regulators have increased transparency by mandating firms to include links to BrokerCheck on their websites, making it easier for consumers to access these records.

In 2009, FINRA implemented significant changes to the rules governing how customer complaints are recorded on a stock broker’s Central Registration Depository (CRD) record. These changes shifted the responsibility onto firms to decide what types of disclosure information need to be reported. This revision in reporting rules came alongside a more aggressive stance from regulators concerning the interpretation of these disclosure requirements.

Whenever a customer complaint is lodged, the employer in the securities industry must update the professional’s Form U4 within 30 days to reflect the complaint on the broker’s CRD record. This can result in even product-related failures being noted on a broker’s CRD if the firm practices aggressive reporting, potentially impacting the broker’s career adversely.

In such cases, the expertise of expungement attorneys and FINRA attorneys becomes crucial. These legal professionals are experienced in navigating the complexities of the financial industry’s regulatory environment. Expungement attorneys are skilled in the processes involved in removing unwarranted or outdated complaints from a broker’s CRD record, which can be essential for preserving their professional reputation. Similarly, FINRA attorneys are adept at defending brokers and advisors in regulatory disputes, helping ensure that their records fairly reflect their history and qualifications.

These attorneys play a vital role in managing and correcting records on BrokerCheck and other public databases, providing strategic advice and representation in disputes over disclosure and reporting. Their involvement is critical for professionals seeking to maintain a clean and accurate public record, addressing any discrepancies and defending against unwarranted claims.

For brokers and investment advisors facing challenges with their public records or dealing with aggressive regulatory interpretations, partnering with a knowledgeable expungement attorney or FINRA attorney can be instrumental. These experts not only help in correcting and expunging records but also provide robust defense in cases of regulatory inquiries or complaints, ensuring that professionals in the securities industry can continue their careers without undue reputational harm.

A brokerage firm must file a Form U5 within 30 days of the termination of a securities industry professional’s employment. The U5 form must accurately disclose the reason for the advisor’s termination.

As a result, being vigilant in protecting your reputation has become more important. Representatives have a right to seek the expungement of negative disclosures from the CRD system when:

If you have suffered from a false or erroneous customer complaint or other type of disclosure, contact us to discuss your options.