May 15, 2014
I am an attorney and a former registered representative. For the past 14 years, I have focused my law practice on representing investors, registered representatives/financial advisors, and independent broker-dealers in investor-initiated and intra-industry disputes in securities arbitration. I write in support of proposed FINRA Rule 2081.
In recent months, FINRA has taken steps to bolster Rule 2080 and to discourage arbitrators from simply "rubber stamping" arbitration awards calling for the expungement of customer dispute information. Nonetheless, there can be no doubt that legitimate customer complaints have been, and continue to be, expunged from the CRD system simply because customers are "bought off" by respondents. The proposed rule goes the extra step of explicitly prohibiting parties from conditioning a settlement on the customer's consent to (or agreement not to oppose) expungement of the arbitration/complaint from the registered representative's U4. I personally believe that proposed Rule 2081 is a step in the right direction, and will help to protect the integrity and transparency of FINRA's CRD system (and, hence, the information that is available to the investing public through BrokerCheck).
Thank you,
Ronald M. Amato
Amato Law Firm, LLC