Clearing the Record: A Financial Professional’s Guide to FINRA Expungement

Introduction: When a Single Complaint Threatens an Entire Career

In today’s financial services industry, your reputation is not just a reflection of your character—it’s a cornerstone of your success. Unfortunately, one misguided or inaccurate complaint on your FINRA BrokerCheck profile can undermine years of hard work, even if that complaint is baseless or resolved without a finding of wrongdoing.

This isn’t just an issue of perception—it’s a matter of livelihood. That’s why FINRA Expungement has become an increasingly vital legal tool for brokers, investment advisors, and financial services professionals seeking to restore their good name.

At Bakhtiari & Harrison, an “AV” rated law firm with extensive experience representing financial professionals in arbitration and regulatory disputes, we understand the high stakes and complex process behind expungement. This article offers a comprehensive, reader-friendly look at what FINRA Expungement is, why it matters, how the process works, and how professionals can leverage it to protect their future.

What Is FINRA Expungement?

FINRA Expungement is the process of removing inaccurate, false, or unfair customer dispute information from a financial professional’s Central Registration Depository (CRD) record and FINRA BrokerCheck profile. These records are publicly available and frequently reviewed by clients, potential employers, and regulators.

Expungement is not a loophole or a way to bury legitimate wrongdoing. Instead, it’s a mechanism designed to correct errors and prevent financial professionals from being permanently tarnished by meritless allegations. FINRA itself calls expungement an “extraordinary remedy,” intended for situations where the disputed information is demonstrably false, clearly erroneous, or involves a person who was not actually involved.

Why Does It Matter?

In the world of finance, trust is everything—and trust is built on clean records and proven reliability. Unfortunately, even a dismissed complaint can carry long-lasting negative consequences:

• Lost job opportunities: Many firms avoid hiring candidates with even minor disclosures.

• Damaged client relationships: Prospective clients often research advisors before engaging.

• Stalled career advancement: Promotions and leadership roles may be denied due to reputational concerns.

• Regulatory complications: Disclosures may prompt additional scrutiny during audits or investigations.

In this environment, FINRA Expungement becomes not just a legal process—but a career-saving measure.

The Legal Framework: FINRA Rule 2080

The legal standard for FINRA Expungement is governed by FINRA Rule 2080, which provides three primary grounds for removing a disclosure:

1. The claim, allegation, or information is factually impossible or clearly erroneous. Example: The advisor was not licensed at the time of the incident or was not associated with the client.

2. The registered person was not involved in the alleged investment-related misconduct. Example: The complaint was directed at a team or firm, but the individual had no direct role.

3. The claim, allegation, or information is false. Example: The client’s assertions are disproven by documentation or third-party findings.

To be successful, the expungement request must clearly fit into one of these categories, and the evidence must support the claim beyond doubt.

The Expungement Process: From Start to Finish

The path to FINRA Expungement is structured but often misunderstood. Here is a step-by-step breakdown of what to expect:

1. Legal Assessment

At Bakhtiari & Harrison, our process begins with a thorough review of the individual’s CRD disclosures and case history. We determine if the facts and evidence support an expungement request under Rule 2080.

2. Initiating Arbitration

If the claim qualifies, the next step is filing a new arbitration claim with FINRA Dispute Resolution Services. This is often called a “straight-in” arbitration and is focused solely on expungement—not damages or financial recovery.

3. Notification of Parties

The original claimant(s), typically a former customer, must be notified and given the opportunity to participate in the arbitration. While some may attend, many choose not to engage in the process again.

4. Arbitration Hearing

A panel of arbitrators will review the case. Your attorney presents the facts, evidence, and arguments that support expungement under Rule 2080. This includes documentation, testimony, and legal precedent.

5. Arbitrator’s Decision

If the panel agrees that the disclosure meets the expungement criteria, they will issue a reasoned award—a formal written explanation of why expungement is justified.

6. Court Confirmation (When Required)

In many instances, especially those involving public records, the arbitration award must be confirmed by a court. This step ensures judicial oversight and adds another layer of legitimacy to the process.

7. Final FINRA Action

Once court confirmation (if applicable) is completed, FINRA will update your CRD record and remove the disclosure from BrokerCheck. The result: a clean, accurate public profile.

Challenges and Recent Developments

In recent years, FINRA has made efforts to tighten the expungement process. Reforms introduced include:

• Shorter filing windows for expungement requests

• Increased transparency in decisions and arbitrator selection

• Limitations on multiple filings to prevent forum shopping

These changes aim to ensure that expungement remains a tool for justice—not abuse. However, they also increase the complexity of the process, making experienced legal guidance more important than ever.

Why Choose Bakhtiari & Harrison?

As a firm with a national reputation for excellence in securities law, Bakhtiari & Harrison brings unique advantages to expungement representation:

• “AV” Rated Legal Team recognized for ethics and skill

• Decades of experience in FINRA arbitration, regulatory defense, and industry disputes

• Deep understanding of Rule 2080 and evolving FINRA procedures

• Client-focused strategy that aligns legal success with professional restoration

Our approach is not only to win the legal battle—but to rebuild trust, restore careers, and protect futures.

Conclusion: Reclaiming Your Professional Identity

In an industry built on trust, transparency, and performance, an inaccurate record can cast a long shadow. But it doesn’t have to. FINRA Expungement offers a second chance to those who have been unfairly marked by complaints that don’t reflect the truth.

The process is rigorous for a reason—because reputations matter. But with the right strategy, evidence, and legal support, expungement can be a transformative step in reclaiming your credibility, restoring opportunities, and moving forward without the burden of a flawed public record.

At Bakhtiari & Harrison, we believe your name should reflect who you are—not who someone wrongly claimed you were.