Paving The Way

April 30th 2023

by Owen Harnett

Summary of Keypoints

  • HLBS Law has developed alternative methods outside of FINRA arbitration to help financial advisors seek expungement of disclosures from CRD, BrokerCheck, IARD, and IAPD records, expanding options beyond traditional FINRA forums.
  • Senior Attorney Chelsea Bauer explains that HLBS has created new pathways in alternative forums nationwide, helping decision makers recognize and grant expungement relief that was previously uncommon or misunderstood.
  • These alternative forums offer greater flexibility, including fewer time limitations and fewer restrictions on viable causes of action, particularly when customer dispute disclosures were investigated and denied by the reporting firm.
  • HLBS has successfully negotiated expungement of denied customer dispute disclosures and, in some cases, settled disclosures without prolonged arbitration, regardless of whether the advisor is FINRA-registered.
  • The firm has also achieved success with Form U5 termination disclosure expungements in alternative forums, providing advisors with additional choices when FINRA arbitration is unavailable or undesirable.

HLBS has paved the way for a new method of assisting financial advisors with cleaning up their regulatory records, including their CRD, BrokerCheck, IARD, and IAPD records, in alternative forums. Many advisors are aware of FINRA arbitration as an option for expunging false and misleading public disclosures from the records of FINRA-registered brokers, but most are unaware that there are other forum options available to them. Chelsea Bauer, a senior attorney at HLBS, explained, “HLBS has worked to create new inroads in alternative forums across the country for brokers to seek expungement of customer disputes as opposed to going directly through FINRA arbitration. We have essentially helped to create this new type of process from the ground up. This used to be virtually unheard of, but now decision makers across the country are starting to better understand this type of relief because we have been so successful in helping so many advisors.” 

  These alternative forums allow much more flexibility for advisors seeking expungement, including fewer concerns about time limitations and fewer restrictions on what constitutes a viable cause of action. If the disclosure was investigated by the reporting firm and denied as having no merit, the likelihood of success increases quite a bit with the right documentation. HLBS has been able to successfully negotiate numerous expungements on denied customer disclosures without the need to engage in prolonged arbitration. Denied customer dispute disclosures have the highest chance of expungement success in all forums, but HLBS has also been able to negotiate the expungements of settled customer dispute disclosures. Whether the disclosure is false, misleading, or true but causing significant harm, there are options available to advisors seeking expungement. These options are available whether the advisor is a FINRA-registered broker or not.

HLBS has also seen success in alternative forums with Form U5 termination disclosure expungements. While these types of cases tend to be more complex than customer dispute cases, especially if the reporting firm opposes any expungement relief, this is an option available to advisors who are not FINRA-registered or who want to avoid FINRA arbitration. The systems that HLBS has created gives advisors choices when it comes to the expungement of all types of disclosures – and we are happy to pave that path.


Photo by: Nick Fewings

Owen Harnett
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