Introduction: When One Disclosure Can Derail a Career
In the financial services industry, trust is not just a value—it’s currency. Investors, employers, and regulators rely on publicly available records to determine a financial professional’s integrity and reliability. But what happens when that record is stained by a misleading or false complaint?
Even when a dispute is resolved in favor of the advisor, the mere presence of a disclosure on FINRA’s BrokerCheck can have long-lasting effects. Careers can stall. Clients may turn away. Opportunities vanish.
That’s where FINRA Expungement comes in.
At Bakhtiari & Harrison, an “AV” rated law firm with a national reputation for excellence in securities arbitration and litigation, we help financial professionals navigate the complex process of clearing their names. This article explores how FINRA Expungement works, who qualifies, and why it’s an essential legal remedy in a highly scrutinized profession.
What Is FINRA Expungement?
FINRA Expungement is a legal process that allows financial professionals to remove certain customer dispute information from the Central Registration Depository (CRD) and BrokerCheck—FINRA’s public-facing database. This includes:
- Unfounded customer complaints
- Dismissed arbitration claims
- Allegations where the advisor was not actually involved
While expungement is not easily granted, it plays a crucial role in ensuring that financial professionals are not unfairly penalized for baseless or clearly erroneous claims. It helps restore a fair public record—one that reflects reality, not rumors or mistakes.
Why FINRA Expungement Matters
A single disclosure—no matter how minor or unfounded—can cast a long shadow:
- Clients may lose confidence, especially in today’s hyper-transparent digital world.
- Firms may hesitate to hire, promote, or retain someone with even one blemish.
- Compliance departments may flag the record for additional scrutiny or limitations.
- Reputation damage is hard to reverse, even when the complaint is proven false.
FINRA Expungement offers professionals a path to restore their public profiles and move forward without the burden of misinformation.
Legal Standards: FINRA Rule 2080
The foundation of the expungement process is FINRA Rule 2080, which outlines the grounds under which expungement may be granted:
- The claim, allegation, or information is factually impossible or clearly erroneous.
Example: The financial professional wasn’t employed by the firm at the time of the alleged incident. - The registered person was not involved in the alleged misconduct.
Example: The complaint was mistakenly attributed to the wrong advisor. - The claim, allegation, or information is false.
Example: The advisor has clear evidence proving the complaint was unfounded.
Meeting these criteria requires thorough documentation and strategic presentation—something best handled with experienced legal counsel.
The FINRA Expungement Process: Step-by-Step
1. Case Assessment
At Bakhtiari & Harrison, we begin with a detailed review of the disclosure, related documents, and the client’s overall CRD history. We assess whether the case qualifies under Rule 2080.
2. Filing a Statement of Claim
If the case qualifies, we initiate a FINRA arbitration focused solely on expungement. This “straight-in” filing does not seek damages, only the removal of the disclosure.
3. Notification of Parties
FINRA requires that all parties named in the original complaint be notified and given the chance to participate in the hearing. In many cases, the customer does not respond or declines to appear.
4. Arbitration Hearing
An arbitrator (or panel) reviews evidence, hears testimony, and determines whether the expungement request meets FINRA Rule 2080’s requirements. If successful, the arbitrator will issue a reasoned award—a detailed explanation supporting the expungement.
5. Court Confirmation
To finalize the process, most expungement awards must be confirmed by a court. Our firm handles this process, ensuring all procedural and jurisdictional requirements are met.
6. CRD and BrokerCheck Update
Once confirmed, the award is submitted to FINRA, and the information is removed from both the CRD and the public BrokerCheck profile.
Recent Trends and Challenges
In recent years, FINRA has introduced reforms aimed at tightening the expungement process. These include:
- Shorter windows for filing expungement claims after a customer dispute is resolved
- Randomized selection of arbitrators to prevent perceived conflicts of interest
- Heightened transparency and stricter procedural rules
These changes reflect FINRA’s commitment to integrity and fairness—but they also raise the bar for successful expungement. Now more than ever, financial professionals need expert legal representation to guide them through the process.
Why Choose Bakhtiari & Harrison?
At Bakhtiari & Harrison, we bring unparalleled experience to every expungement case. Our team:
- Has successfully represented clients in expungement hearings before FINRA, AAA, and in state and federal courts
- Maintains an “AV” rating, reflecting the highest levels of professional excellence and ethical standards
- Delivers customized legal strategies tailored to each client’s background, disclosure history, and professional goals
- Understands the emotional and reputational toll of unjust complaints—and fights to correct them
From initial case evaluation to final court confirmation, we provide end-to-end legal support with clarity, urgency, and results.
A Case in Point
Imagine a financial advisor who receives a complaint during a volatile market downturn. The customer later admits the claim was emotional and exaggerated, and the case is dismissed. But the disclosure remains public.
Years later, this advisor is passed over for partnership—not because of performance, but because of a record that tells the wrong story.
This is not a hypothetical. We’ve helped professionals in this exact situation clear their records and reclaim their reputations.
Conclusion: Don’t Let a False Disclosure Define Your Future
In an industry built on precision, integrity, and public trust, your professional record matters. FINRA Expungement is more than a legal procedure—it’s an opportunity to correct the record, protect your career, and reclaim your narrative.
