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FINRA Board Approves Rule that Codifies Expungement Procedures for Arbitrators

By Mark H. Astarita, Esq.

In an apparent effort to make sure that everyone really, really, really understands that FINRA does not trust its own arbitrators, FINRA's Board of Governors approved a rule proposal that would impose expungement procedures requiring arbitrators to take specific steps, including issuing a written explanation, before recommending expungement of information related to arbitration cases from a registered person's Central Registration Depository (CRD) record. According to FINRA, this proposal is designed to assure that expungement occurs only when one of the narrow grounds specified in the FINRA rules?factual impossibility, no involvement by the registered person or falsity?is determined and documented by the arbitrators.

Full post as published by SECLaw.com on December 18, 2007 (boomark / email).