Another lingering question is whether Finra will actually follow through with the Board’s approval. The Board has twice previously approved the codification of other expungement-related rules, but Finra has not submitted those rules to the SEC for approval. Specifically, in September 2015, and again in December 2018, the Board approved the codification of Finra’s “Expanded Guidance on Expungement.” Yet, to this day, Finra has not sought SEC approval of the Expanded Guidance.
Unlike the majority of Finra’s original proposal, the creation of a special roster of arbitrators does not seem likely to make it more difficult for those seeking expungement. Instead, the creation of a roster of expungement-qualified arbitrators with advanced training should improve the quality of arbitrators, though it may also reduce the number of qualified arbitrators from which the parties may select.
While many questions remain, Finra appears for now to be taking a measured approach to transforming the expungement process.
Joel Everest is a principal in the Financial Institutions Litigation and Arbitration practice at the law firm of Bressler, Amery & Ross. David Hantman is a principal at the firm and head of its Expungement practice. They are reachable at [email protected] and [email protected].