FINRA may continue to expunge, without a court order, expungement directives contained in arbitration awards rendered in disputes between registered representatives and firms in which the arbitration panel states that expungement relief is being granted because of the defamatory nature of the information. Registered representatives, investment advisers and others employed in the securities industry are required to disclose certain prior convictions, including some expunged convictions, to Finra or . Learn more about Katherine on her attorney profile here. There are many reasons that background check companies report expunged or sealed offenses. As noted, FINRA Rule 2080 (b) requires a party seeking expungement under Rule 2080 (a) to name FINRA as an additional party and serve FINRA with all appropriate documents, unless FINRA waives this obligation upon request of the party. You could threaten to sue them for libel. The waters get muddied, however, when you consider FINRA's requirement that brokers also disclose anymisdemeanorconvictions orchargesthat relate to truthfulness (for instance, fraud or bribery) or theft. It's a common practice to seal the records. Are you a financial advisor with an unfair blemish on your CRD record? FINRA Rule 20813 (here) prohibits firms and registered representatives from conditioning settlement of a customer dispute on or otherwise compensating a customer for the customers agreement to consent to, or not to oppose, the firms or representatives request to expunge such information from the CRD system. After years of staying out of trouble or even having charges dropped, most people are relieved to finally obtain an order of expungement and/or sealing from the court clearing their names. The latter scenario occurs in cases in which the customer does not participate in the expungement hearing, or the requesting party states that a customer has indicated that he or she will not oppose the expungement request. FINRA and State participation in the court confirmation proceeding is an additional safeguard to ensure that courts are aware of the standards of Rule 2080 and relevant regulatory and investor protection interests. We are FINRA and NMLS licensing attorneys and are here to help you with that process. Requiring a broker named in a customer arbitration to request expungement during the customer arbitration or forfeit the ability to request expungement of that same information in any subsequent proceeding, ensuring that a panel that hears the full merits of a customer arbitration also reviews the expungement request.
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