Advisors must present their case to an arbitrator through FINRA’s dispute resolution forum in order to have an investor dispute or libelous U5 termination successfully removed from BrokerCheck or the CRD.
Our Senior Associate, Harris Freedman, J.D., explains how advisors can get through the difficult process unscathed in our latest Ask An AdvisorLaw Expert video series segment.
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If you’re dealing with a meritless or false disclosure on your record, in the form of a customer dispute, FINRA form U5 termination, regulatory infraction, criminal disclosure, or more, contact us for a complimentary consultation immediately.
Well first of all, in order to have something removed from the CRD or BrokerCheck, FINRA requires us to get a court order from a judge, essentially ordering that FINRA remove the disclosure. Now whether that’s a customer dispute that we’re trying to expunge or a U5 termination disclosure, we traditionally file a claim with FINRA called a “statement of claim.” It’s very similar to what you would file in state or federal court. Once we file the statement of claim, we’ll have an arbitrator assigned to your case. The arbitrator is very similar to a judge. Once we have the arbitrator selected, we’ll accomplish a couple of benchmarks along the way. We have to conduct discovery, and we file various motions, witness lists, and other documents that are required in order to get these disclosures off your record. Once we’re at the expungement hearing itself, the arbitrator will give you an opportunity to present your side of the story, and your attorney will have an opportunity to provide arguments and assist you along the way. After the expungement hearing, which traditionally takes place over the phone, we’ll get an order or an award from an arbitrator stating whether they’re recommending the expungement or denying the expungement. If they recommend the expungement, we then take that award to state court and get the judge to confirm the award. Once the court confirms the award, it’s essentially a binding order by the court — and FINRA can’t undo it and is required to remove the disclosures from your record.