Client Alerts

FINRA Withdraws Proposed Expungement Rule Changes

By: Christopher D. Seps

About: Financial Services

June 1, 2021 – Last Friday, FINRA announced in a press release that it has withdrawn from SEC consideration its proposed rule changes regarding the expungement process. The proposed rule changes were dramatic, which we highlighted in webinars and on our blog, and included:

FINRA also pushed out a new webpage today devoted solely to expungement. It includes key statistics about the number of expungements granted, as well as the proposed rules that have now been tabled. The website indicates that the SEC clearly took issue with the proposed changes, as they required FINRA to respond to comments on three separate occasions (according to the timeline on this new website).

This development is significant to say the least. FINRA has been working on these rule changes since 2017 when it published Regulatory Notice 17-42. Now, four years later, it is not clear where FINRA goes from here. FINRA describes the withdrawal as “temporary” and vows to keep working to improve the expungement process.

Ulmer’s Financial Services Practice Group is comprised of litigation and business attorneys who keep current on the problems facing the financial services industry. With decades of experience addressing a wide range of financial services issues, our attorneys work in close collaboration with clients to resolve matters inside and outside of the courtroom. We will continue to follow this developing story. Please reach out to our team if you have any questions.

The information provided in this client alert speaks only to the information and guidance we have available as of the date of publication and is subject to change. We will continue to follow further issued guidance and regulations and endeavor to post those updates via our website. This legal update was created by Ulmer & Berne LLP, and is not intended as a substitute for professional legal advice. Receipt of this client alert, by itself, does not create an attorney client relationship. For any questions, or for further information, please contact Christopher D. Seps at cseps@ulmer.com.