PIABA finds arbitrators grant expungement 90% of the time
Lawyers group says regulators and the customers who had complaints should be able to present evidence in expungement requests.
May 18, 2021
The Public Investors Advocate Bar Association released a report on recent expungement awards on Tuesday and renewed its call for the Financial Industry Regulatory Authority Inc. to change the way it handles expungements.
Analyzing 700 expungement awards from Aug. 1, 2019, to Oct. 31, 2020, PIABA found that arbitrators granted expungement requests 90% of the time.
“The data show that the reason is that Finra’s arbitration process allows brokers and brokerage firms to make expungement requests to arbitrators that are unopposed the vast majority of the time,” PIABA said in its study.
PIABA Foundation/PIABA: NEW FINRA Steps To Fix Flaws In Broker Misconduct âExpungementâ Process Wonât Work, Independent Investor Advocate Needed - 1,000+ Percent Increase In Expungement Awards: As SEC Heads To May 28th Review Of FINRA Rules, Third PIABA Foundation/PIABA Study Of Process Wiping Clean Broker Records Finds Major Problems Persist And New Steps Needed To Prevent âUnchallengedâ Expungements Date
18/05/2021
The “expungement” process in which brokers facing complaints from aggrieved investors are allowed to erase all evidence of misconduct is surging out of control and just underwent its third major review by the PIABA Foundation and the Public Investors Advocate Bar Association (PIABA). After analyzing 700 expungements from August 1, 2019 to October 31, 2020, the two groups concluded FINRA’s proposed rules headed for May 28
PIABA: FINRA Arbitrators Grant Expungements 90% of the Time PIABA urges FINRA to establish an Investor Advocate position to ensure valid customer complaints are not expunged from brokers CRDs.
The Financial Industry Regulatory Authority arbitrators grant expungement requests 90% of the time, according to a new analysis conducted by the Public Investors Advocate Bar Association (PIABA).
In the newly released report, PIABA and the PIABA Foundation argued the high rate of successful expungement requests stems from the structure of the proceedings and the frequent lack of any opposition. The association, which represents investors in securities-related arbitration and litigation, claimed that the regulatory agency must make it easier for interested parties who might oppose an expungement request, such as securities regulators and customers, to participate.
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Congressional rumblings about outlawing mandatory arbitration clauses are relatively common, but they have not been successful. Ever since a hard-won battle in the 1980s, the industry has been calling the shots about where investors could plead their case and the predictable efforts to change that have gone nowhere.
This time around, things may be a little different.
Start with the fact that a wave of populist voters earned President Biden both the House and the Senate. Now he’s crisscrossing the country, stumping for his three trillion-dollar infrastructure plan, arguing that a guaranteed tax hike for individuals and corporations is the best way to get that done. So with all of this happening, no one should be surprised by the ascendance of the Investors Choice Act, which would not only ban future mandatory arbitration clauses but void the ones already in existence.
Finra should review ban on in-person arbitration hearings
One industry group is now calling on Finra to end the remote hearings it says are harming investors. Two hundred and sixty-three hearings have been conducted remotely as of the end of March.
May 10, 2021 2 MINS
When the Financial Industry Regulatory Authority Inc. decided to shut down in-person arbitration hearings last March, claimants and respondents embraced the idea of resolving disputes from the comfort of home via the convenience of a Zoom call.
Participants and legal teams quickly adapted to virtual hearings and Finra which runs the arbitration system that adjudicates claims made by customers against brokerages and registered representatives extended the postponement through July 2 of this year.