U.S. Senator Chuck Grassley (R-IA) and Senator Jack Reed (D-RI) today sent a bipartisan letter asking the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck program,FINRA to clarify and strengthen standards for expungement of investor complaints against brokers.
Citing a recent Public Investors Arbitration Bar Association (PIABA) study, which found that FINRA arbitrators granted expungement relief in 96.9% of cases from May 2009 through December 2011, the U.S. Senators said they are concerned about the number of times investor complaints may be expunged, or removed, from publicly available broker records maintained by FINRA via BrokerCheck.
The Senators asked FINRA to publicly detail the number of instances in which FINRA has questioned or challenged the provision of expungement relief and provide a detailed description of the circumstances of each case.
The Senators also asked FINRA to respond to the recommended changes cited in the PIABA study and explain whether FINRA intends to adopt each recommendation.