Under current FINRA rules, brokers are allowed to remove disciplinary actions
filed against them for years from public records, however new rules may
prevent that in the future. Proposed changes include a special provision
that would allow brokers only one year to request the removal of disciplinary
actions from online BrokerCheck records.
FINRA maintains BrokerCheck as a public protection tool, so investors can
do background checks on brokers before they invest their money. The Public
Investors Arbitration Bar Association and other investor advocates support
BrokerCheck, but argue that FINRA's decision to allow brokers to eliminate
evidence of past indiscretions undermines the purpose and value of the database.
FINRA Changes MayHelp to Protect Investors
The Securities and Exchange Commission (SEC)
has a searchable database that lists all brokers who have been suspended or barred from practice
for committing federal securities law violations. The SEC database was
established to help investors and potential investors identify unethical
brokers and financial advisors who may commit
investment fraud and cause financial harm to unsuspecting clients. The website makes prior
violations of brokers and advisors and all repeat offenders more visible,
so investors can take steps to help protect themselves from fraud.
FINRA is currently taking steps to change the expungement process. They
are discussing ways to establish a roster of arbitrators with additional
training and specific background experience to approve expungement requests
by brokers. They may establish a three-person panel of specially trained
and experienced arbitrators to grant all expungement requests. A unanimous
vote of three arbitrators would be required to clear any
broker disciplinary actions from public record. FINRA believes that establishing a special panel to
handle expungements may make it easier for investors and consumers to
participate in expungement hearings and provide important information
Registered securities firms and regulatory authorities submit information
regarding brokerage and financial investment firms to the Central Registration
Depository (CRD). This is the main registration and licensing system used
by the United States securities industry. CRD collects disciplinary, administrative,
and other information about registered personnel. They also collect customer
complaints, arbitration claims, court filings and court judgments resulting
from such claims. Some of the information collected by CRD is made public
knowledge and available through FINRA's Broker Check.
If you have been a victim of broker investment fraud and need claims assistance,
contact Meyer Wilson at 888-390-6491 for a free consultation today. With two decades of experience and more than $350 million recovered for
its clients, you can trust our investment and securities fraud attorneys
to provide you with the representation you require in your time of need.