Stockbroker expungement cases are technical in nature and stockbrokers and financial advisors should not try to navigate an expungement case on their own.
Stockbrokers and financial advisors can remove customer complaints from their permanent record through the expungement process. Customer complaints against stockbrokers and financial advisors are serious. In the financial services industry, complaints are recorded on a stockbroker or financial advisor’s permanent record regardless of whether a complaint is substantiated, proven, or part of an investigation, lawsuit, or arbitration claim.
FINRA provides a special arbitration procedure for expungement cases.
Stockbrokers and financial advisors who have had complaints or arbitration claims filed against them need to act quickly if they choose to seek expungement.
Expungement issues arise in three situations. First, a customer files an arbitration claim against a firm and the broker/advisor. In that instance, the broker/advisor can request an expungement in the arbitration case.
Second, a customer files an arbitration claim against the broker-dealer firm, but does not name the broker/advisor. In that situation, the broker/advisor can file a motion to intervene in the arbitration and seek expungement.
In both of the above-referenced situations, the broker/advisor could also wait until the conclusion of the arbitration and file a separate arbitration claim for expungement against the broker-dealer firm.
Third, a customer files a complaint against the broker/advisor, but does not file an arbitration claim. Many of these complaints are still recorded on the broker/advisor’s BrokerCheck report and can impact their professional reputation. In those instances, the broker/advisor can still take steps to have that complaint expunged.
In order to prevail in an expungement action, the broker/advisor must be able to demonstrate:
- The claim, allegation or information was factually impossible or clearly erroneous,
- The registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation or conversion of funds, OR
- the claim, allegation or information is false.
The Kueser Law Firm represents stockbrokers and financial advisors in expungement cases. Please contact us today if you would like to speak with Jason Kueser regarding an expungement matter.