A senator wrote to FINRAand the SEC raising concerns about the high rate that broker-dealers have complaints expunged from their records.  See http://www.markey.senate.gove/documents/2013-10-25_FINRA.pdf; http://www.markey.senate.gove/documents/2013-10-25_SEC.pdf.

In the letter to FINRA, the senator said the high expungement rate means that BrokerCheck is not providing investors with accurate information, and “rogue brokers” continue to operate their

A frequent tool for settlement was to make a stipulated award that included expungement of the registered representative’s U-4 a condition of settlement.  FINRA recently announced that it is “developing rule changes that would prohibit the practice of conditioning settlements on an investor’s agreement not to oppose expungement.”

It should come as no shock that

A must read is the article in this quarter’ s The Neutral Corner, published by FINRA Dispute Resolution, and authored by John D. Nachmann, Esq., Deputy Chief Counsel, FINRA Registration and Disclosure.  Mr. Nachmann’s article, “Limitations on the Types of Disclosure Events That May Be Expunged From the Central Registration Depository Through Arbitration,” provides

Over the course of the next 18 months, FINRA will proceed on two tracks regarding the removal of negative information from broker records.

FINRA submitted to the Securities and Exchange Commission a rule proposal to facilitate the process for brokers who are not named in a case to expunge their records, where there was a