With the heated competition for clients, “there’s good reason to want to get your records cleaned up,” Lipner said.

Permanent Records

Before a change in 2010, complaints that had not been adjudicated or settled for nuisance amounts would be archived and not shown on BrokerCheck after two years.

Now a complaint “stays on the record permanently,” says David Robbins, a partner in the New York City law firm of Kaufmann Gildin Robbins & Oppenheim LLP who, like Lipner, represents investors and brokers, including some broker expungement cases.

Robbins feels an accumulation of meritless complaints that some brokers have experienced is contributing to the demand for expungements.

“I’ve got [a case] now,” he says. “Nobody likes to be unjustly accused.”

At the same time, word has gotten out that expungements are not hard to get, Lipner adds. “It’s a very high [win] rate—about 90 percent.”

The review of recent cases by Financial Advisor confirms that most of the time, arbitrators agree to expunge negative information.

The cases are handled like a regular arbitration, except that advisors/claimants usually don’t ask for damages; they just want a clean record. Brokerage firms or complaining customers are named as defendants and must be noticed. In most cases, neither the customers nor the firms object to the expungement requests.

Customers Often Don't Object

“You have to make a good faith effort to contact customers, not just send a message to a dead e-mail address,” Kennedy says.

Under Finra rules, brokers must show that a customer’s complaint was false, factually impossible or clearly erroneous, or that the rep was not involved with the client.