FINRA Expungements: PIABA’s Press Release Recalls Mark Twain On Statistics

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PIABA – the securities-investor plaintiff’s bar – issued an October 16 press release roundly criticizing industry self-regulatory rules allowing a broker to seek expungement of a customer-claim from her permanent record. PIABA’s release relies on blunt statistics showing that about 60% of arbitration awards containing the word “expungement” granted that relief (with a higher 89-96% rate for awards entered on settlements). The group failed to mention, though, recent reforms requiring arbitrators to make an affirmative finding (after a hearing) that:

- The claim was factually impossible or without merit; or

- The broker wasn’t even involved in the alleged wrong-doing; or

- The claim or allegations were false...

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