SEC Approves Amended FINRA Rule 2081 Prohibiting Settlements Conditioned on Expungement

more+
less-

On July 22, the SEC approved amendments to FINRA Rule 2081 that prohibit member firms from conditioning arbitration settlements (or seeking to) upon a customer’s assent to CRD expungement relief.  The Rule amendments prohibit paying any consideration or compensation for expungement relief and apply even if a customer suggests such a bargain.  SEC Rel. No. 34-72649 (July 22, 2014).  In cases that may warrant expungement relief under the conditions specified in Rule 2081, SIFMA’s comment letter suggested, and FINRA responded approvingly to, using settlement-agreement language reciting that:  (1)  Respondents intend to seek expungement relief; (2) expungement relief was not a condition of the settlement; (3) Respondents have not paid any consideration related to expungement; and (4) the Claimant may participate in expungement proceedings as (s)he chooses.  We addressed FINRA’s Rule proposal earlier this year in, “FINRA Moves to Make Expungement Independent” (May 14, 2014).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Burr & Forman | Attorney Advertising

Written by:

more+
less-

Burr & Forman on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×