FINRA approved new rules to require member firms to verify the accuracy of information provided on a prospective applicant’s Form U4.  See http://www.finra.org/Newsroom/NewsReleases/2014/P493588.

The new FINRA rules will now force firms to adopt new written procedures to verify information from public sources of available criminal, bankruptcy, and litigation records.   FINRA also stated that it

FINRA recently announced a change to the supervision rule to require hiring firms to conduct background checks on new employees.  This rule change raises the question; what have member firms been doing all along. 

In this day and age of instant information, having a new registered representative complete his/her U-4 should have only been a

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