Customer Dispute Expungement Through FINRA Arbitration

When a broker-dealer files a Form U4 or U5 with the Central Registration Depository (CRD), customer disputes, terminations, and other disclosures become part of an advisor’s public record and appear both on the advisor’s CRD record, as well as their BrokerCheck profile.

FINRA asserts that its purpose for publishing customer disputes to BrokerCheck and the CRD is so that investors can make informed choices about advisors and firms. While legitimate customer disputes do exist and do get published to BrokerCheck and the CRD, unfortunately, so do frivolous and meritless claims. Regardless of the accuracy of the allegations, disclosures will appear on the advisor’s public records permanently. 

The Extraordinary Remedy of FINRA Expungement in 2025

One avenue for relief exists: seeking expungement through FINRA’s arbitration system.FINRA considers expungement to be an “extraordinary remedy” and, as of 2025, achieving it has become significantly more difficult due to the implementation of the FINRA Rules 13806 and 13807 amendments to the Code of Arbitration Procedure.

Prior to 2025, an advisor could often seek expungement before a sole arbitrator. Now, the rules are significantly stricter:

• Three-Person Panel Requirement: In most cases, expungement requests must be decided by a three-person special arbitrator panel, composed of arbitrators with specific experience.
• Unanimous Decision: The expungement request now requires a unanimous decision from the three-person panel (versus the previous option for a sole arbitrator).
• Limited Time Frame: An advisor is generally limited to a two-year window from the date the information was first displayed on BrokerCheck to request expungement (or three years for "late-filed" claims).

Within FINRA’s arbitration system, an advisor files a Statement of Claim, naming the reporting firm as the Respondent and requesting the expungement of one or more customer disputes. A hearing is held, and the special arbitration panel determines whether the disclosure meets the stringent standards of FINRA Rule 2080—that the claim, allegation, or information is false, clearly erroneous, or factually impossible, or that the advisor was not involved in the alleged activity.

When expungement is granted, the panel issues an award that includes a written explanation of the basis for recommending expungement.

Because of the 2025 rule changes instituting a strict time limit and making the process substantially harder, it is in advisors’ best interests to seek expungement of any unwarranted disclosures as soon as possible. Delaying action risks missing the window entirely, allowing frivolous and unwarranted claims to permanently tarnish your professional reputation.

AdvisorLaw recognizes the significant impact that these new rules have on a financial advisor’s career. Our services were created exclusively for financial advisors, and we are dedicated to helping you navigate the complex and now significantly more difficult FINRA expungement system. We provide the necessary legal experience to prepare and present the strongest possible case to the special arbitration panel, giving you the best chance at relief.