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ARTICLE · 27 APRIL 2023

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The SEC Approves FINRA's Expungement Rule Proposal

Riker, Danzig, Scherer, Hyland & Perretti
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On April 12, 2023, the U.S. Securities and Exchange Commission ("SEC") approved the Financial Industry Regulatory Authority's ("FINRA") revised proposal to establish more difficult procedures for

United StatesLitigation, Mediation & Arbitration
Anthony Borrelli
Anthony Borrelli
Hunt Ricker
Hunt Ricker
Labinot Berlajolli
Labinot Berlajolli

On April 12, 2023, the U.S. Securities and Exchange Commission ("SEC") approved the Financial Industry Regulatory Authority's ("FINRA") revised proposal to establish more difficult procedures for expungement of customer complaints from an Associated Person's records maintained by the Central Registration Depository ("CRD"). FINRA has not yet announced the effective date of these new rules, and will do so in a Regulatory Notice.

FINRA originally submitted a proposal to the SEC for approval in September 2020. However, following concerns raised by the SEC, investor attorneys, and state security regulators that the reforms did not go far enough, FINRA withdrew the proposal in May 2021. FINRA filed the revised proposal with the SEC in July 2022. Most notably, the new rule will:

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