Expungement of FINRA Records After Investigation

A single customer complaint on your BrokerCheck record can follow you for a decade or longer—affecting your ability to change firms, build client relationships, and advance your career in the securities industry. Even complaints that were completely frivolous, settled for business reasons without any finding of wrongdoing, or proven false after investigation remain visible to anyone who searches your name. The disclosure doesn’t explain the context. It doesn’t note that you were never found liable. It just sits there, creating questions in the minds of prospective clients and compliance officers reviewing your record for a new position.

FINRA offers an expungement process that allows registered representatives to petition for removal of certain customer dispute information from the Central Registration Depository (CRD) and BrokerCheck. But what most advisors don’t realize is that a critical deadline is rapidly approaching. After October 16, 2025, complaints that were settled can no longer be expunged through FINRA’s arbitration process—period. This isn’t a new limitation period that starts running from some future event. It’s a door closing on all existing settled complaints, and once it closes, your only option is pursuing expungement through state or federal court, which is significantly more expensive and far less likely to succeed.

The expungement process itself has become increasingly difficult under rules that took effect in October 2023. A three-person panel must unanimously agree that your case meets one of three narrow grounds for relief. One arbitrator’s skepticism can kill your entire case. FINRA has created a Special Arbitrator Roster of experienced arbitrators with additional expungement training, and these arbitrators take their gatekeeping role seriously. The success rate for expungement has dropped significantly since the new rules took effect.

This article addresses what most FINRA expungement guides miss: the strategic realities of pursuing expungement in today’s environment. Understanding when expungement is worth pursuing, what evidence actually persuades arbitrators, how to navigate customer opposition, and why the October 2025 deadline creates genuine urgency for advisors with settled complaints on their records. The stakes are your professional reputation and career trajectory—information that will follow you for years deserves a strategic approach.

The grounds for expungement are narrow by design. Under FINRA Rule 2080, arbitrators can only recommend expungement if they find that the claim is factually impossible or clearly erroneous, that you were not involved in the alleged violation, or that the claim is false. These aren’t easy standards to meet. “Clearly erroneous” doesn’t mean the customer’s investment lost money—it means the allegations themselves cannot be accurate based on the evidence. Most expungement cases rise or fall on the quality of evidence supporting these narrow grounds.

The October 2025 Deadline: Why Settled Complaints Are About to Become Permanent

Most advisors with settled customer complaints on there BrokerCheck records dont realize that a critical deadline is approaching that will permanantly close there opportunity for expungement. Under rule changes that FINRA has been pushing for years, after October 16, 2025, complaints that are coded as “settled” on your CRD record can no longer be expunged through FINRA’s arbitration forum. This isnt a statute of limitations that begins running from when you file—its a hard cutoff date that applies to all existing settled complaints regardles of when they occurred.

Think about what this means if you have a settled complaint on your record. Maybe your firm settled a frivolous complaint for bussiness reasons, without any finding against you. Maybe the complaint was baseless but your firm’s insurance carrier wanted to avoid the cost of arbitration. Maybe you personaly did nothing wrong, but the settlement included you as a named respondant. Whatever the circumstances, if that complaint is coded as “settled” and you dont pursue expungement before October 2025, that disclosure will remain on your BrokerCheck permanantly—or at least for ten years after you leave the industry.

The rationale behind FINRA’s rule change is that settled complaints represent cases where the customer recieved compensation, suggesting some merit to the underlying claim. FINRA beleives these disclosures provide valuable information to investors. But the reality is that many settlements occure for reasons completley unrelated to the merit of the complaint—litigation costs, insurance carrier preferences, firm risk managment decisions. Advisors who were genuinley innocent but whose firms settled can find themselves trapped by a disclosure that misrepresents there conduct.

Warning: The October 2025 deadline cannot be extended. If you have settled complaints on your record that you want to expunge, you must initiate the arbitration process well before the deadline. FINRA arbitration can take six months to a year or longer. Waiting until September 2025 to start the process may mean you miss the window entirely, even if your case has genuine merit.

The Three Grounds for Expungement: What They Actually Mean

FINRA Rule 2080 establishes three narrow grounds upon which arbitrators can recomend expungement. Understanding what each ground actualy requires is essential to evaluating whether your case has a realistic chance of success:

Ground 1: Factually Impossible or Clearly Erroneous – This is the most commonly pursued ground, but its frequantly misunderstood. “Clearly erroneous” dosent mean the customer’s investment performed poorly, or that the customer was unreasonable in there expectations, or even that you gave appropriate advice. It means the factual allegations in the complaint cannot be accurate based on documentary evidence. For example, if a customer claimed you made unsuitable recomendations during a time period when you werent even there registered representative, thats factually impossible. If a customer alleged you sold them a specific product that your firm didnt even offer, thats clearly erroneous.

Ground 2: Not Involved – This ground applies when you were named in a complaint but actualy had no involvement in the conduct alleged. Maybe you were a branch manager held responsable for another representatives actions. Maybe you were named because your name appeared on account documents even though you had no role in the disputed transactions. Proving “not involved” requires demonstrating that your connection to the complaint was merely administrative or supervisory without direct participation in the alleged wrongdoing.

Ground 3: False – This is the most difficult ground to establish because it requires proving a negative—that the customers allegations are not just erroneous but affirmativly false. Customers have the right to state there beleifs about what happened, and arbitrators are reluctant to characterize customer complaints as “false” even when the customers recollection differs significantly from the documentary record. This ground is most likely to succeed when their is clear evidence of fabrication or when the customer’s allegations contradict undisputed facts.

The Unanimous Panel Requirement: Why One Arbitrator Can Kill Your Case

Under the rules that took effect in October 2023, expungement requires unanimous agreement from a three-person panel of arbitrators. This is not a majority vote—all three arbitrators must agree that at least one of the three narrow grounds has been established. If even one arbitrator remains unconvinced, your expungement request must be denied regardless of how strong the other two arbitrators beleive your case to be.

The unanimous requirement creates significant strategic challenges. Each arbitrator brings there own perspective, experiance, and philosophy to the case. Some arbitrators view expungement as an extraordinary remedy that should rarely be granted. Others are more sympathetic to advisors caught up in complaints they didnt deserve. The panel selection process offers limited ability to identify which arbitrators are likely to be sympathetic, and even experienced expungement counsel can be surprised by panel dynamics.

What this means practically is that your evidence must be overwhelming rather then merely persuasive. You cant rely on reasonable inferences or benefit of the doubt. Every arbitrator must be convinced beyond any reasonable skepticism that your case meets the narrow grounds. Documentation that directly contradicts the customers allegations is essential. Testimony that explains away concerns isnt enough—you need evidence that eliminates those concerns entirely.

Evidence That Wins: What Actually Persuades FINRA Arbitrators

After hundreds of expungement cases, certain evidence patterns consistantly appear in sucessful cases while others consistantly fail. Understanding what persuades arbitrators is the diffrence between a case that succeeds and one that wastes tens of thousands of dollars:

Documentary Evidence Trumps Everything – Arbitrators give far more weight to contemporanous documents than to testimony about what happened years ago. Account opening documents, signed disclosures, recorded calls, emails sent during the relevant period, trade confirmations, account statements—these forms of evidence are nearly unimpeachable. If documents contradict the customers allegations, arbitrators have a basis for finding the claim clearly erroneous.

Customer Settlement Agreements – If the underlying complaint was settled, the settlement agreement itself can be powerfull evidence. Many settlements include provisions stating that the settlement is not an admission of liability, that respondants deny the allegations, or that the settlement was made solely to avoid litigation costs. These provisions support the argument that the settlement dosent reflect the merit of the customers claims.

Regulatory Outcomes – If the complaint triggered regulatory review that concluded without action against you, this supports expungement. Arbitrators recognize that regulators investigate complaints and that a decision to take no action suggests the allegations lacked merit. However, the absence of regulatory action alone is usually insufficiant—you still need affirmative evidence supporting one of the three grounds.

Timeline Evidence – Many expungement cases succeed by demonstrating that the advisor wasn’t involved during the relevant time period. Registration records showing when you became the customers representative, trade records showing who executed disputed transactions, supervision records showing who had responsability—this timeline evidence can establish the “not involved” ground clearly and convincingly.

The Customer Opposition Problem You Didn’t See Coming

Under current FINRA rules, customers must be notified when there former advisor seeks expungement of a complaint they filed. Customers have the right to participate in the expungement hearing—either by submitting a written statement or by appearing and testifying. While customer participation rates are relatively low, when customers do oppose expungement, they can significantly impact the outcome.

Customer opposition creates credability contests that arbitrators hate. When a customer appears and maintains there allegations, arbitrators face a he-said/she-said situation that makes them uncomfortable finding the complaint “clearly erroneous” or “false.” Even if you have strong documentary evidence, a sympathetic customer testifying about there experiance can create doubt in arbitrators minds. One skeptical arbitrator influenced by customer testimony can prevent the unanimous vote you need.

Strategic timing can minimize customer opposition risk. Expungement requests filed years after the underlying complaint may face less engaged customers—people move on, change contact information, loose interest in old disputes. However, waiting too long can run afoul of the new time limits, and the October 2025 deadline for settled complaints creates urgancy that may preclude waiting for customer disengagment.

Straight-In Requests vs. Customer Arbitration Expungement

Theres two primary paths to FINRA expungement: requesting expungement as part of an ongoing customer arbitration, or filing a “straight-in” request after the customer dispute has concluded. Each path has distinct advantages and disadvantages that affect your strategic calculus:

Expungement in Customer Arbitration – If your facing an active customer arbitration, you can request expungement as part of that proceeding. The advantage is efficency—the same panel hearing the customers claims can also decide expungement. The disadvantage is that requesting expungement during litigation can appear premature or presumptious, and customers are guarenteed to be engaged since their actively pursuing there claims.

Straight-In Requests – After customer litigation concludes, you can file a seperate arbitration seeking expungement only. Under the new rules, straight-in requests are heard by panels selected from the Special Arbitrator Roster—arbitrators with additional expungement training. These arbitrators take there gatekeeping role seriously and may scrutinize requests more carefully than general panels. However, straight-in requests may face less engaged customers, particulary if significant time has passed since the underlying dispute.

The new two-year and three-year time limits significantly constrain the straight-in path. You must file within two years after customer arbitration or litigation concludes, or within three years after the complaint was initially reported to CRD if it never evolved into formal litigation. Missing these deadlines means loosing access to FINRA arbitration and having to pursue expungement through the courts—a much more difficult path.

The Career Calculation: When Expungement Is Worth Pursuing

Expungement isnt free. Attorney fees typicaly range from $5,000 to $25,000 or more depending on case complexity. FINRA filing fees add several thousand dollars. Expert witnesses, if needed, add additional costs. The process takes six months to a year or longer. And theres no guarentee of success—even strong cases can fail if one arbitrator remains unconvinced. Before pursuing expungement, honest career calculation is essential:

How Many Disclosures? – One customer complaint may be explainable; multiple disclosures become a pattern that raising more concerns. Expunging a single disclosure that leaves you with a clean record has more career value than expunging one of several disclosures.

What Does the Disclosure Say? – Some disclosures are more damaging than others. A complaint alleging unsuitable recomendations that was settled for $10,000 is less damaging than one alleging theft or forgery, even if both were equally frivolous. Consider how the disclosure reads to someone reviewing your BrokerCheck.

How Much Time Until It Ages Off? – BrokerCheck displays disclosures for ten years after you leave the industry. If your nearing retirement, the disclosure may age off naturally before expungement would provide significant benifit. If your early in your career, ten years of carrying the disclosure may justify the investment in expungement.

How Strong Is Your Case? – Be honest about whether your case meets the narrow expungement grounds. Not every disclosure should be expunged, and pursuing weak cases wastes money and time. Experienced FINRA expungement counsel can assess your likelihood of success before you commit significant resources.

The Court Confirmation Requirement

Even if arbitrators unanimously recomend expungement, your not done. For customer dispute information, FINRA requires that you obtain a court order confirming the arbitration award before the information will be removed from CRD and BrokerCheck. This adds additional time, expense, and uncertainity to the process.

Court confirmation is generaly a ministerial process—courts typically confirm arbitration awards without substantial review of the underlying merits. However, customers can oppose confirmation, and some courts conduct more thorough review than others. The confirmation process typically takes several additional months and requires filing fees and potentially additional attorney time.

The court confirmation requirement exists because FINRA wants judicial oversight before permanently removing disclosure information that investors might find relevent. This extra step distinguishes expungement from ordinary arbitration awards and reflects FINRA’s position that expungement is an extraordinary remedy requiring heightned procedural protections.

What Cannot Be Expunged

FINRA Rule 2080 applies only to customer dispute information. Their are categories of CRD disclosures that cannot be removed through the expungement process regardless of there merit:

Regulatory Actions – Disciplinary actions by FINRA, the SEC, state securities regulators, or other self-regulatory organizations cannot be expunged through Rule 2080. If you have regulatory disclosures, they will remain on your record regardless of any customer complaint expungement you achieve.

Criminal Disclosures – Criminal charges and convictions reported to CRD cannot be expunged through FINRA arbitration. Criminal record expungement or sealing must be pursued through the criminal justice system, and even then, CRD reporting requirements may continue to apply.

Financial Disclosures – Bankruptcies, liens, judgments, and other financial disclosures cannot be expunged. These remain on your CRD record according to there own retention schedules regardless of customer dispute expungement.

Internal Reviews – Disclosures of internal reviews or investigations by member firms cannot be expunged through customer dispute expungement procedures. If a firm conducted an internal investigation and reported it to CRD, that disclosure remains.

Taking Action: Steps to Protect Your Record

If you have customer dispute information on your BrokerCheck that you beleive qualifies for expungement, the time to act is now—particulary if those disclosures involve settled complaints affected by the October 2025 deadline:

Assess Your Disclosures – Pull your BrokerCheck report and CRD registration record. Review each disclosure carefuly. Understand exactly what is being disclosed and how it reads to someone unfamiliar with the circumstances.

Evaluate the Expungement Grounds – For each disclosure, honestly assess whether one of the three narrow grounds applies. Do you have documentary evidence that the allegations were factually impossible or clearly erroneous? Can you demonstrate you werent involved? Can you prove the allegations were false? Without at least one strong ground, expungement is unlikely to succeed.

Consult Experienced Counsel – FINRA expungement is a specialized practice area. Attorneys who focus on securities arbitration and specifically on expungement matters can assess your case realistically and advise whether pursuit is worthwhile. Most offer initial consultations to evaluate cases before significant investment.

Act Before Deadlines – If you have settled complaints you want to expunge, the October 2025 deadline is not negotiable. If your approaching the two-year or three-year time limits for straight-in requests, missing those deadlines closes the FINRA arbitration path entirely. Time limits in FINRA expungement are strictly enforced.

Your BrokerCheck record represents your professional reputation in the securities industry. Disclosures that misrepresent your conduct or character deserve scrutiny and, where appropriate, challenge. The expungement process is difficult and expensive, but for advisors with legitimate claims, it may be the only path to a record that accurately reflects there professional history. For more information on FINRA expungement rules and procedures, consult FINRA’s official guidance or speak with qualified securities counsel.