SEC Approves FINRA Rule To Prohibit Conditioning Customer Settlements On Expungement

more+
less-

On July 23, FINRA announced that the SEC approved a new rule prohibiting FINRA-supervised firms and registered representatives from conditioning settlement of a customer dispute on—or otherwise compensating a customer for—the customer’s agreement to consent to, or not to oppose, the firm’s or representative’s request to expunge such information from the Central Registration Depository (CRD) system. The CRD system is an online registration and licensing system for the securities industry, which contains information regarding members and registered representatives, such as personal information, registration, and employment history, as well as disclosure information including criminal matters, regulatory and disciplinary actions, civil judicial actions, and information relating to customer complaints and disputes. The information FINRA makes public through BrokerCheck is derived from CRD. Brokers who wish to have a customer dispute removed from the CRD system and, thereby, from BrokerCheck, must obtain a court order confirming an arbitration award recommending expungement relief. FINRA will announce the effective date of the new rule in a regulatory notice to be published shortly.

Written by:

more+
less-

BuckleySandler LLP 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. Or, sign up using your email address.
×
Loading...
×
×