How Do I Get My FINRA Record Expunged

Summary of Keypoints

• FINRA expungement removes specific disclosures from an advisor’s CRD and BrokerCheck record: Expungement is a formal process used to eliminate certain customer dispute information or termination-related disclosures that can negatively affect career prospects, reputation, and client trust.
• Only certain record types qualify under strict standards: Customer dispute expungement is governed by FINRA Rule 2080 and requires proof that allegations were false, clearly erroneous, factually impossible, or that the advisor was not involved, while Form U5 expungement typically relies on defamation-based standards.
• The process is complex and procedural: Expungement usually occurs through FINRA arbitration, may involve specially trained arbitrators, customer notification, evidentiary hearings, written findings, and court confirmation before FINRA will remove the disclosure.
• Timing, evidence, and strategy are critical to success: Although FINRA records are generally permanent, prompt action, strong documentary and testimonial evidence, thoughtful arbitrator considerations, and awareness of recent rule changes significantly affect outcomes.
• Experienced FINRA counsel greatly improves outcomes: Due to heightened standards and evolving rules, advisors seeking expungement benefit from attorneys with specific FINRA expungement experience to evaluate viability, prepare evidence, and navigate arbitration and confirmation requirements effectively.

For financial advisors, the information contained in their FINRA record can significantly impact career advancement, client acquisition, and professional reputation. When negative disclosures appear on this record, many advisors ask the critical question: 

“How do I get my FINRA record expunged?” 

Expungement refers to the removal of certain information from an advisor’s Central Registration Depository (CRD) record, which subsequently removes it from FINRA’s public BrokerCheck system.

The expungement process requires navigating complex regulatory frameworks, specific legal standards, and evolving FINRA rules. Understanding these requirements represents the first step toward potentially clearing negative disclosures from a professional record. While expungement presents challenges, it remains a viable option for advisors seeking to address disclosures that meet specific removal criteria.

Understanding FINRA Record Types

The FINRA Central Registration Depository (CRD) system houses comprehensive information about registered financial advisors, including their registration history, customer complaints, regulatory actions, and employment separations. This information appears in filings submitted through Forms U4 and U5, creating a detailed regulatory profile that follows advisors throughout their careers.

Customer dispute information includes customer complaints, arbitrations, and civil litigation reported on Forms U4 and U5. These disclosures often prove most damaging to an advisor’s reputation, as they suggest potential client harm. Even when complaints lack merit or result in no action, their mere presence on an advisor’s record can create significant professional obstacles.

Regulatory disclosures document investigations, sanctions, and other regulatory actions taken by FINRA, the SEC, state regulators, or other self-regulatory organizations. These disclosures typically represent the most serious matters appearing on an advisor’s record and present substantial challenges for expungement.

Employment separation disclosures appear when advisors leave firms under circumstances other than clearly voluntary resignation. Form U5 termination explanations can significantly impact an advisor’s ability to secure new positions, particularly when they suggest compliance concerns or policy violations.

How Long Does FINRA Keep Records

FINRA maintains most disclosure information permanently, creating a lasting record that follows advisors throughout their careers. This permanent retention policy applies to most customer complaints, regulatory actions, and termination disclosures. Even when an advisor changes firms or leaves the industry entirely, these records remain accessible through BrokerCheck and the CRD system.

Certain financial disclosures follow specific retention timeframes rather than permanent reporting. Bankruptcy filings remain on an advisor’s record for ten years from the date of filing. Satisfied judgments and liens generally remain reportable for ten years from the satisfaction date, while unsatisfied judgments and liens remain until satisfied.

FINRA distinguishes between records maintenance and public disclosure. Some information maintained in the CRD system may not appear on BrokerCheck after certain periods. For example, customer complaints that do not result in arbitration or settlement and involve less than $10,000 in alleged damages may be removed from public view after two years, though they remain in the CRD system.

The extended retention of disclosure information underscores the importance of addressing problematic disclosures through proper expungement procedures. Without formal expungement, most negative information remains on an advisor’s record indefinitely, potentially affecting career opportunities decades after the original events occurred.

Does FINRA Have a Statute of Limitations

FINRA does not maintain a traditional statute of limitations for maintaining records or for pursuing disciplinary actions against registered representatives. Enforcement actions can be initiated based on conduct that occurred many years earlier, though FINRA generally focuses on more recent activities.

For customer arbitration claims, FINRA Rule 12206 establishes a six-year eligibility rule, often referred to informally as a “statute of limitations.” This rule prevents customers from bringing arbitration claims more than six years after the events giving rise to the dispute. However, this limitation applies to the filing of customer claims, not to FINRA’s ability to maintain records or pursue enforcement actions.

For expungement requests, different timing considerations apply. While no absolute statute of limitations exists for seeking expungement, practical considerations often make expedited requests more effective. Straight-in expungement requests (those filed independently, not as part of customer arbitration) face increasing scrutiny when filed long after the underlying events. Recent FINRA rule changes have also established specific timing requirements for certain types of expungement requests.

Despite the absence of formal limitations periods for most expungement situations, financial advisors benefit from addressing disclosure issues promptly. As time passes, supporting documentation becomes harder to obtain, witnesses’ memories fade, and arbitrators may question why the matter wasn’t addressed sooner. These practical limitations often prove more restrictive than any formal statute of limitations.

Legal Standards for Expungement

FINRA Rule 2080 establishes the standards for customer dispute expungement. Under this rule, advisors must demonstrate that: (1) the claim or allegation is factually impossible or clearly erroneous; (2) the registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation, or conversion of funds; or (3) the claim, allegation, or information is false.

These standards establish a standard for expungement approval, limiting expungement to the circumstances described above. Arbitrators must make written findings reflecting which of these standards applies and provide a brief explanation of the reasons for finding that the standard was satisfied.

For Form U5 termination explanation expungement, different standards apply. These cases typically proceed under defamation or defamatory in nature theories, requiring the advisor to demonstrate that the statements were either potentially defamatory in nature or false, or made with malice or reckless disregard for the truth. 

FINRA emphasizes that expungement constitutes an “extraordinary remedy” that should be granted only under appropriate circumstances. Recent rule changes have further reinforced these standards while adding procedural requirements designed to ensure thorough consideration of expungement requests. However, with an experienced attorney, these new standards can be met.

The Expungement Process for Customer Disputes

Customer dispute expungement typically proceeds through FINRA’s arbitration forum. The process begins with filing a statement of claim requesting expungement relief. This document presents the legal and factual basis for expungement, addressing the specific Rule 2080 standards that apply to the case.

Expungement requests may occur in two contexts: in-case expungement (requested during the underlying customer arbitration) or straight-in expungement (filed as a separate arbitration specifically seeking expungement). Each approach offers distinct strategic advantages and challenges. Recent rule changes have significantly altered the procedures for straight-in expungement requests, adding complexity to the process.

FINRA rules require notification to customers and their counsel when expungement is requested. Customers have the opportunity to participate in expungement hearings by appearing, testifying, or submitting documents. Even when customers choose not to participate, arbitrators must consider the underlying arbitration record before granting expungement.

Arbitrator selection plays a crucial role in expungement proceedings. Under current rules, expungement requests typically proceed before a panel of three arbitrators specially trained and qualified to handle expungement matters. Under current rules, arbitrators are assigned from a special roster for customer dispute resolution. Arbitrators are ranked and selected in cases that do not involve straight in expungement requests of customer disputes. The composition of this panel can significantly influence expungement outcomes.

Expungement hearings require thorough preparation and professional presentation. Advisors seeking expungement must present documentary evidence and testimony supporting their position that the disclosure meets one of the Rule 2080 standards. This evidence must address both the merits of the underlying complaint and the specific grounds for expungement.

After arbitrators grant expungement, the process requires court confirmation. This judicial review provides an additional safeguard ensuring that the expungement meets applicable legal standards. Without court confirmation, FINRA will not remove the disclosure from the advisor’s record, even after a favorable arbitration decision.

The Expungement Process for Form U5 Termination Disclosures

Form U5 expungement follows a different process than customer dispute expungement. These cases typically name the former employer as respondent, alleging defamation based on false or misleading termination language. The advisor must demonstrate that the U5 language contains a false statement or is potentially defamatory in nature.

U5 expungement cases often involve more complex evidence regarding employment policies, internal investigations, and termination decisions. Successful cases typically require substantial documentation contradicting the firm’s characterization of the separation. Contemporaneous performance reviews, compliance examinations, and communication with management often prove particularly valuable in these proceedings.

Timing considerations differ for U5 expungement. Depending on claims made under State law or FINRA Code, statutes of limitations for defamation typically apply, creating more definitive filing deadlines than exist for customer dispute expungement. These limitations periods generally range from one to six years, depending on state law, making prompt action particularly important.

Strategic settlement approaches often differ in U5 cases. While firms may vigorously defend customer dispute expungements to avoid creating adverse precedent for customer claims, they may approach U5 expungement differently when presented with compelling evidence contradicting their original filing. This dynamic sometimes creates settlement opportunities not available in customer dispute expungement.

Court confirmation requirements sometimes apply to U5 expungement, adding an additional procedural step after receiving a favorable arbitration decision. The confirmation process ensures judicial review of the arbitrators’ decision before information is removed from the CRD system and BrokerCheck if the ruling was based on a standard outside of FINRA Rule 8312.

Evidence Needed for Successful Expungement

Successful expungement requires documentary evidence supporting the specific grounds for relief. For customer dispute expungement, this evidence typically includes account statements, transaction confirmations, correspondence, notes from client meetings, and compliance reviews. These documents help demonstrate that claims were clearly erroneous or factually impossible.

Witness testimony plays an essential role in most expungement cases. The advisor seeking expungement typically provides detailed testimony explaining the factual background and contradicting the allegations. Additional witnesses, such as branch managers, compliance officers, or other advisors familiar with the situation, can provide crucial corroborating testimony.

Expert testimony sometimes strengthens expungement presentations, particularly in cases involving complex products or strategies. Securities experts can help arbitrators understand technical issues and industry standards, providing context for evaluating the merits of the underlying allegations and the appropriateness of expungement.

Addressing opposing evidence requires particular attention. Arbitrators expect candid acknowledgment of adverse facts rather than selective presentation. Successful expungement presentations address problematic evidence directly, providing context and explanation rather than ignoring unfavorable information.

The narrative presentation in expungement cases demands particular care. Beyond simply presenting evidence, successful expungement requires crafting a compelling story that helps arbitrators understand why the specific Rule 2080 standards have been satisfied. This narrative approach transforms documentary evidence and testimony into a cohesive presentation supporting expungement.

Strategic Considerations for Expungement Requests

Timing considerations significantly impact expungement strategy. For customer disputes resolved through settlement, filing for expungement before the settlement becomes final often proves advantageous. This approach ensures access to relevant documents before they become more difficult to obtain after case closure.

Arbitrator selection represents another critical strategic element. Experienced securities attorneys monitor arbitrator decision patterns and develop insights regarding how different arbitrators approach expungement requests. 

Cost-benefit analysis should precede any expungement request. Given the significant resources required for successful expungement, advisors should realistically assess their likelihood of success and the professional value of removing the disclosure. Some disclosures present greater obstacles than others, affecting this analysis.

Potential outcomes extend beyond simple approval or denial. Arbitrators sometimes grant partial expungement, modifying rather than removing disclosure language. Understanding these potential middle-ground outcomes helps advisors establish realistic expectations and develop appropriate strategies.

Recent Changes to Expungement Rules

FINRA has implemented significant rule changes affecting the expungement process in recent years. These modifications generally establish additional procedural requirements and limitations, reflecting regulatory concerns about ensuring appropriate expungement standards.

Recent changes include establishing specialized arbitrator rosters for expungement cases, imposing time limitations on straight-in expungement requests, enhancing customer notification requirements, and requiring unanimous rather than majority arbitrator decisions for expungement approval.

The practical effect of these changes has been to make expungement more challenging to obtain, increasing the need for thorough preparation and an experienced FINRA expungement attorney. 

Legal Representation in Expungement Proceedings

The complexity of expungement proceedings makes experienced legal representation particularly valuable. FINRA attorneys specializing in expungement understand the specific Rule 2080 standards, the procedural requirements for different types of expungement requests, and the strategic considerations that influence outcomes.

Attorney representation provides significant advantages in case preparation and presentation. Experienced counsel understand how to develop compelling documentary evidence, prepare effective testimony, and craft persuasive arguments addressing the specific expungement standards. This expertise proves particularly valuable given the high threshold for expungement approval.

Statistical evidence suggests significantly higher success rates for represented advisors compared to those proceeding without counsel. This difference reflects both the complexity of the expungement process and the value of experience in navigating FINRA’s arbitration forum.

When selecting expungement counsel, advisors should consider specific experience with FINRA expungement cases rather than general securities or employment law background. The unique procedural and substantive requirements of expungement demand specialized knowledge that comes only from handling these specific matters regularly.

Conclusion

Expungement remains a viable option for financial advisors seeking to address certain types of disclosure information on their FINRA records. While the process presents challenges, advisors meeting the specific regulatory standards can successfully remove information that otherwise would permanently impact their professional reputation.

Understanding the expungement process, applicable standards, and strategic considerations provides the foundation for addressing disclosure issues effectively. While FINRA maintains most records permanently absent formal expungement, the availability of this remedy offers valuable opportunities for advisors with legitimate grounds for relief.

Financial advisors should approach disclosure management proactively rather than reactively. Early evaluation of expungement options, thorough preparation, and professional presentation provide the strongest foundation for successful results. For advisors concerned about the impact of disclosure information on their professional future, consultation with experienced FINRA counsel represents a valuable first step toward addressing these issues effectively.

Owen Harnett