financialadvisoriq.com (July 24, 2014) -- A newly approved rule aimed at making it harder for brokers to scrub their records of client complaints doesn’t go far enough, critics say. In fact, according to Financial Advisor magazine, regulators themselves remain worried about the high proportion of so-called expungements granted after cases are settled. In green-lighting the rule, the SEC told Finra to “determine whether additional rulemaking is necessary.”

The rule, which Finra sent to the SEC in April, bans brokers from making damage payments to dissatisfied clients contingent on the clients’ promising not to oppose an expungement request. Such agreements are “common practice,” according to The Wall Street Journal. Between May 2009 and yearend 2011, a study by the Public Investors Arbitration Bar Association found, 97% of settled cases were expunged upon request, up from 89% from 2007 to May 2009.

And the SEC received several comment letters saying advisors would still be able to cleanse their records of material complaints, InvestmentNews reports.

Seth Lipner, an attorney who represents investors, tells IN the settlement agreements are made “with a wink and a nod, and nothing is ever put in writing.” He suggests clients who have filed complaints agree to expungement because “they just want to be left in peace” once a case is settled.

That doesn’t address the fact that prospects shopping for a broker may not be able to trust a clean record on Finra’s website, however. The industry-funded regulator says it will continue looking for ways to limit conditional expungements.