FinancialPlanning (August 10, 2022) - The latest FINRA proposal on removing client complaints from brokers' records is setting up a rulemaking debate that's likely to be long and contentious.
FINRA tabled its last rule proposal a year ago under criticism that the reforms didn't go far enough to fix the problems with so-called expungement cases in FINRA arbitration. After releasing a white paper earlier this year signaling its intent to press forward again with a potential rule assigning the cases to a specially trained group of arbitrators, the regulator issued a formal proposal on July 29 seeking SEC approval.
The plan is raising some concerns in the industry and among attorneys who represent brokers, while drawing general praise from client advocates and state regulators.