PIABA 22nd Annual Meeting Materials
When a customer makes a complaint against his or her broker, oftentimes that complaint is reported on the broker’s public record and made available to the public through the BrokerCheck system provided by the Financial Industry Regulatory Authority (FINRA). The National Association of Securities Dealers (NASD) established BrokerCheck in 1998 to provide the public with information about the professional background, business practices, and conduct of brokers and brokerage firms.
Understandably, brokers generally attempt to keep as clean a record as possible because potential clients may use BrokerCheck to decide whether to invest with a particular broker. To remove a complaint from his or her record, the broker must seek expungement of the complaint. If a broker has settled the complaint with the customer, the broker may seek the customer’s cooperation in the expungement process. Over time, FINRA has made changes to its expungement procedures, which has created interesting ethical issues. This paper examines these expungement procedures and the ethical implications for a customer’s attorney when a broker seeks a customer’s cooperation in the process.