Aug. 30, 2022
August 30, 2022 FINRA and PIABA consistently focus on the success rate of expungements and claim that this is a problem. Instead of understanding the reason behind that success, they try to refine the process. The real problem is the threshold for what is classified as a complaint. In other professional industries, if someone files a bar complaint on an attorney or a professional complaint on a doctor, that complaint is evaluated on its merits by a neutral body and the person gets a chance to defend the claim before it is ever publicly displayed. Yet in the financial industry, there is no minimum threshold. So plaintiff's attorneys know that they can file meritless claims, get a quick settlement, and move on to the next claim. That claim, however meritless it may be, will be on the financial advisor's record permanently. So as long as there is no minimum threshold or independent evaluation before it is permanently placed on someone's record, expungements will continue to have an extremely high success rate. The irony is that BrokerCheck is supposed to be a conveyor of truth yet with no minimum threshold, there are more frivolous than legitimate complaints displayed which makes it unclear to the investor public which financial advisors are actually the bad actors and which ones were simply the victims of quick complaint/settlements. This rule change should be denied because it is addressing the symptom and not the cause. FINRA needs to evaluate and create a minimum threshold for complaints before it limits the ability by advisors to get the complaints expunged.