DEFENDING YOUR PROFESSIONAL INTEGRITY
Stay current on recent changes in the regulatory environment
Veteran financial advisor’s have seen countless examples of the disparate imbalance of power which exists between the regulators and the individual brokers. The regulators are tasked with writing the rules, determining whether such rules were followed or violated, and determining appropriate fines, penalties, sanctions, suspension, or license revocations associated with the perceived violation.
Appealing a determination made by FINRA involves a review by the SEC (who entrusts FINRA with their authority), and in some instances, the right to have the matter reviewed by the National Adjudicatory Council (a FINRA committee) before the matter may be reviewed by FINRA’s Board of Governors. It seems clear that there is no real independent third party review or opportunity for an unbiased consideration. The participants, in varying capacities, are heavily entrenched within the ranks of the SEC or FINRA. As a result, the public-facing BrokerCheck displays a great deal of information which provides no value to the investing public and offers no indication of the rep’s performance as an FA.
Norm Vonnegut, Columnist for The Wall Street Journal, wrote about a broker who set off a fire extinguisher at his school when he was 13 years-old. FINRA’s disclosure requirements resulted in the memorialization of this childhood prank as a “Criminal – Final” disclosure on the rep’s BrokerCheck profile (see Norm’s article here). The absurdity of rules and regulations marring a broker for harmless pranks as a child is abundantly clear. Despite the 51 proposed changes to the regulatory process, FINRA’s Dispute Resolution Task Force remains silent on this effect on licensed brokers.
FA’s looking to put an end to the ongoing harm to their business caused by Disclosure Events currently showing on their BrokerCheck profiles, must pursue expungement of these through the Rule 2080 process. No relief will be provided unilaterally by the regulators. It is up to the individual reps to initiate the process of requesting an expungement award from FINRA.
AdvisorLaw has a dedicated team of attorneys and staff whom specialize in representing brokers marred by disclosures viable for expungement from the CRD system. Contact me today if you or a colleague has disclosures on BrokerCheck that may qualify for expungement.
See our commentary in InvestmentNews here.
President, Managing Attorney
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This blog is my ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.