The Financial Industry Regulatory Authority (“FINRA”) maintains disclosure records for all registered representatives on the Central Registration Depository (“CRD”). All of these disclosures are available to state and federal regulators and potential employers. Further, some of these disclosures are also publically available on FINRA’s BrokerCheck portal, making them available to potential and current clients. These disclosures contain detailed information provided by firms on registered representatives’ Form U4 or Form U5 concerning:
- Involuntary termination of employment
- Customer complaints and FINRA arbitrations
- Internal employment-related investigations
- Arrests and criminal history
Registered representatives have no control over these disclosures, even when they are completely false, defamatory or erroneous. For example, it is not uncommon for firms to resolve customer-related complaints and arbitrations without any input from registered representatives. Even when the customer’s allegations are clearly false and the firm is resolving the compliant or arbitration to avoid the costs of litigation, the claim and resolution may be disclosed and become part of a registered representative’s permanent record unless expunged. Similarly, a registered representative who is involuntarily terminated has no control over the firm’s subsequent disclosure even if it is false or otherwise defamatory.
These disclosures can permanently and negatively impact a registered representative’s reputation, and in turn their ability to obtain clients and employment. Registered representatives should hire competent counsel to evaluate whether there is a basis for expungement of any concerning CRD disclosure. Our firm has considerable experience with FINRA’s procedures for expunging false, defamatory and erroneous disclosures from a registered representative’s CRD records. This experience includes seeking expungement in existing FINRA customer or employment arbitrations, and in separately filing FINRA arbitrations for the sole purpose of expungement.
If you have any concerns about problematic disclosures on your CRD records and/or available through FINRA BrokerCheck, contact the expert attorneys at DWH Legal for a no-commitment consultation.