Richard Ketchum, CEO of the Financial Industry Regulatory Authority, has until Jan. 6 to tell Sens. Jack Reed, D-R.I., and Chuck Grassley, R-Iowa, if FINRA plans to adopt any of the measures the Public Investors Arbitration Bar Association (PIABA) recommended regarding FINRA’s expungement policy.
The PIABA study, released in mid-October, raised concerns about the number of times investor complaints may be expunged, or removed, from publicly available broker records maintained on FINRA’s BrokerCheck.
Expungement relief was granted in 96.9% of cases from May 2009 through December 2011, according to the study.
The two senators told Ketchum in their letter that as the PIABA study indicates, the BrokerCheck system, which FINRA says should be the first resource investors turn to when choosing whether to do business a particular firm or individual, “may not enable investors to easily obtain all the information necessary to determine whether to hire a particular FINRA-registered broker.”
What Your Peers Are Reading
Reed and Grassley told Ketchum that they share FINRA’s view that “expungement is an extraordinary remedy that should be granted only under appropriate circumstances,” and that it should be permitted “only when it has no meaningful investor protection or regulatory value.”