The study also found that “by contrast, there is only limited evidence that successful expungements improve career prospects.”
Said Warren, “Given Finra's crucial role in promoting safe markets and regulating the securities industry, it is of utmost importance that the organization consider the impact of broker expungement on the future misconduct of industry brokers.”
The board voted to file the expungement reform proposal with the Securities and Exchange Commission, which must approve Finra rules.
The Finra board also approved releasing for public comment a proposal that would require registered representatives to obtain permission from their firms before they become a beneficiary, executor, trustee or receive power of attorney for a customer.
To be on Finra's expungement arbitrator roster, an arbitrator would be required to have these additional qualifications:
• Completed enhanced expungement training.
• Admitted to practice law in at least one jurisdiction.
• Five years experience in any one of the following disciplines: litigation, federal or state securities regulation, administrative law, service as a securities regulator or service as a judge.