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FINRA considers Rules That Restrict the Expungement Process

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Over the years, the Financial Industry Regulatory Authority has continued to tighten the rules that govern the making of expungement requests. Nowadays, the process has become both hectic and expensive.

Some loopholes have made it easy for them to avoid arbitration fees during the expungement process. A FINRA expunction is a non-monetary claim. There is a fee you need to pay for the expungement process to go on.

Understanding the new changes by FINRA

The current rules are a bit different. Brokers need to tag at least $1 to their claim if it exceeds $300. That is if their expungement request is to get heard.

Currently, you only need a single arbitrator to review these claims. However, there are significant changes in the new rules because three arbitrators must be present for the filing to continue. 

There is a need to have three arbitrators ask questions about the process and ensure there is factual information before they make a decision.

One of the reasons why FINRA had to revise these rules is because of too many complaints. These complaints came from other bodies working together with FINRA. 

For instance, one study criticized FINRA for granting too many expungements within one year. It even went further to a call for the database that contains the expungement records to get brought down.

Can I get an unwarranted customer complaint removed from my CRD?

Sometimes customers can give complaints that are not true. Although some may be true, many people end up frustrating brokers and their firms with unwarranted claims and consequently tainting their image by reporting them to their employer or FINRA.

Although investors may feel like brokers are on the wrong, there are many other possibilities. Most of the reasons why an investor gets a loss may not even relate to the broker. Mostly, they are external such as market changes or the brokerage firm. The broker may have little to no influence on it.

Most customer complaints are not even related to the actual happenings. They are financially or emotionally driven and should not get used to terminate a person’s career with a firm or the operations of a firm.

There is a need to keep a clean record at the Central Registration Depository. Potential clients, regulators, and employers check through the records to find out whether you are the kind of person they can work with. If you have a negative history on the depository, your chances of getting people to work with are low.

Luckily, there is a way out for people that fall victim to such customer’s actions. Once a broker files a claim, the arbitration process begins immediately, and they or their firm become the respondents while the customer also makes an appearance at the hearing.

The best thing a broker can do in this case is to find someone to help them in this process. They should speak to an investment loss attorney about the specific situation and get the necessary guidance.