expungement claim

FINRA Charging Brokers More for Expungement Claims

Aug 24, 2020

Starting September 14, 2020, brokers wishing to expunge information from their records will have to pay higher minimum fees to have their claims heard before the Financial Industry Regulatory Authority (“FINRA”). The SEC has recently approved FINRA’s request to amended its Arbitration Procedures for Customer and Industry Disputes to apply minimum fees in connection with requests for expungement of customer dispute information, whether the request is made as part of the customer arbitration or the broker files an expungement request in a separate arbitration (“straight-in request”). The amendments also apply a minimum process fee and member surcharge to straight-in requests, as well as a minimum hearing session fee to expungement-only hearings.  A Broker’s Record of Customer Complaints is Publically Available on BrokerCheck® Customer complaints and arbitration claims are reported through the Central Registration Depository (CRD®) system which is the national licensing and registration system used by the U.S. securities industry. The information in the CRD system is generally submitted by registered securities firms, brokers, and regulatory authorities in response to questions on the uniform registration forms including the U4 and U5 forms. Among other things, these forms collect administrative, regulatory, criminal history, and disciplinary information about associated persons, including customer complaints, arbitration claims, and court filings made by customers. Certain CRD information is publically available through a system called BrokerCheck®. BrokerCheck can be used by investors to make informed choices about the brokers and broker-dealer firms with which they may conduct business.  Brokers Can Seek to Get CRD Information Expunged Through FINRA  There are situations where brokers can have certain false information removed from their CRD system through a FINRA arbitration process. In order to balance the benefits of disclosing information about customer disputes to regulators and investors with the goal of protecting brokers from the publication of false allegations against them, a process for expungement was established. This process, under FINRA Rule 2080, allows for the expungement of claims where the allegations made about the broker are factually impossible or clearly erroneous.  There are two ways through the FINRA process that a broker can seek expungement of customer dispute information: 1) the broker or his or her firm (called a “requesting party”) may seek expungement through the FINRA arbitration process by making the request during a customer arbitration; or 2)  the broker may request expungement by filing a “straight-in request,” which is a separate arbitration claim filed by the broker against a former or current member firm or the customer.  FINRA Raised its Filing Fee Mostly in Response to Straight In Requests FINRA implemented this new process because it became concerned about practices to avoid fees applicable to expungement requests, particularly straight-in requests. This was because brokers who were filing straight-in requests often added a small monetary claim (usually, one dollar) to the expungement request to reduce the fees assessed against the broker and qualify for an arbitration heard by a single arbitrator. Typically, an expungement request would be considered non-monetary in nature since it is generally just a request to remove a customer complaint. Non-monetary claims had a higher filing fee than claims for damages, so this one […]

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Finra attorney

Can a FINRA Attorney Help Me Recover Losses from Investment Fraud?

Feb 3, 2020

You worked hard for the nest egg you have accumulated. Understandably, you want to be extremely careful about who you trust to help you invest those assets. Of course, once you choose a securities broker or securities firm, it is that much more devastating when that firm, or the individual broker, betrays that important trust.   If you are the victim of investment fraud at the hand of an unscrupulous broker, you have options. Yet, it would be wise to get the assistance of an attorney who can help you obtain compensation for the fraud or negligence of your broker or brokerage firm. Typically, in the investment-fraud world, attorneys who help fraud victims are referred to as FINRA attorneys. The reason for that is because most disputes between customers and clients of investment firms are handled via arbitration through the Financial Industry Regulatory Authority, FINRA. The process of working with a FINRA attorney is as follows. In this article, we will talk about the role of FINRA and what a FINRA attorney can do to help you recover your investment losses. If, after reading this blog, you would like to learn a little more about getting a FINRA attorney to help you with your situation, we welcome you to call Attorney Melanie Cherdack.   Former wall street lawyer Melanie Cherdack understands the plight of those who were victims of investment fraud. She has “seen it all” when it comes to the schemes that investment brokers use to defraud their clients. Contact us today on our online contact form, or by calling 888-768-2499. We are the investment fraud lawyers who will level the playing field for you.     What is FINRA? As noted, FINRA stands for the Financial Industry Regulatory Authority. FINRA does precisely what its title suggests – it regulates the financial industry. Specifically, it oversees the 3,726 brokerage firms and the over 600,000 brokers in the country. FINRA is not a government entity. It is a private, not-for-profit organization. Yet, it acts similar to a government agency in its oversight role of financial broker-dealers in the United States.   All member broker-dealers in the United States are subject to FINRA’s rules and regulations. FINRA is important to investors as it is a specific regulatory body dedicated to overseeing the complex securities industry. Rather than having a court of law adjudicate a complex securities matter, the FINRA forum appoints arbitrators who have the necessary securities or business expertise to more easily grasp the legal issues surrounding allegations of investment fraud.   That all means that if a particular broker or broker-dealer engages in conduct that violates FINRA’s rules and that  violation causes investment losses, then you as the investor have a right to file a complaint with FINRA in an effort to get compensation for your losses.   What Can a FINRA Attorney Do to Help You? A FINRA attorney can help you seek an award in your favor for any investment losses that you suffered. The FINRA attorney would, therefore, represent your interests in a FINRA arbitration. The process of working with FINRA attorney is as follows: Begin with a Case Review The first thing […]

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