This is the last in our series on the FINRA expungement process, and, unfortunately, the future looks grim. Not only has FINRA made it nearly impossible (in an obvious attempt to curry favor with the public investor bar), but now it is considering some shocking additional changes to the process. Essentially, FINRA is looking to put the proverbial “final nail in the coffin” to any hope for expungement. For example, FINRA is considering increased fees…

This is our second blog on the vanishing FINRA expungement process. FINRA identifies specific grounds for expungement in FINRA Rule 2080. Rule 2080(b)(1) provided three specific grounds for expungement relief: (1)       the claim, allegation or information is factually impossible or clearly erroneous; (2) the registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds; or (3) the claim, allegation or information is false. Although FINRA Rule…

Over the past 20 years, FINRA has made it nearly impossible for brokers to expunge customer complaints and dispute information from their public records. Over the next three blogs, we will discuss the evolution of FINRA’s expungement process and how difficult expungement relief is for brokers to obtain in the future. In 1981, the CRD system was created, and is now an online registration and licensing system for the securities industry. The CRD contains, among…

FINRA maybe in the process of allowing its examiners to punish member firms for rules’ infractions.  See  https://www.law360.com/assetmanagement/articles/1143015/finra-wants-to-let-examiners-lower-the-boom-on-brokers?nl_pk=5882ca7d-b76e-42a1-a1fe-eb96fcbcf60f&utm_source=newsletter&utm_medium=email&utm_campaign=assetmanagement.  There is no proposed rule as of today.  However, such a rule would be a game changer in the sense that examiners, who, generally, do not have the authority to enforce FINRA’s rules would now be in the proverbial “driver’s seat” without any of the ordinary checks FINRA usually provides in the enforcement process.  In any event,…

Although songs and Broadway musicals routinely call upon “memories” as inspiration, it usually is not the province for decisions in FINRA arbitrations.  However, we were treated to a memory lesson in what, at first blush, seemed to be a run of the mill expungement case. See Evans v. Merrill Lynch Pierce Fenner & Smith Inc., FINRA Office of Dispute Resolution Case No.: 18-00845. As many know, registered persons may move to expunge certain information from their FINRA…

Way back in 2017, the SEC obtained an emergency asset freeze against an internet-based ICO involving certain Canadian residents, who had raised over $15 million on a variety of social media sites through an alleged fraudulent scheme. http://www.sec.gov/litigation/complaints/2017/comp-pr2017-219.pdf. At the time, it made major news and helped launch the SEC’s Cybersecurity Unit.  Of course, there have been many other actions since that time, but this action demonstrates that, with technology, it is impossible to ignore the potential for cross-border fraud.  Essentially, do…

Over the last several months, there has been an increase in questions from registered investment advisers relating to using hypothetical performance information.  Generally, the use of such information is fraught with danger as well as SEC scrutiny.  Not so long ago, the SEC went after a number of investment advisers and forced them to pay a total in fines, interest, and disgorgement of nearly $10 million.  See  https://www.sec.gov/litigation/admin/2017/33-10443.pdf; https://www.sec.gov/litigation/admin/2017/34-82244.pdf; and https://www.sec.gov/litigation/admin/2017/ia-4823.pdf. The SEC complained that these advisers did…