The FINRA expungement process is how a financial professional removes an inaccurate customer dispute from the Central Registration Depository and BrokerCheck. It runs on two tracks stacked back to back: a FINRA arbitration hearing that recommends expungement, followed by a court order confirming the award. Start to finish, most cases take twelve to eighteen months. Panels have granted relief in roughly two-thirds of recent cases filed under the current rules, but nothing about the process is automatic, and the procedural requirements trip up brokers who underestimate the preparation involved.
What Qualifies for Expungement
Only customer dispute information in the CRD is eligible under FINRA Rule 2080.1Financial Industry Regulatory Authority. Frequently Asked Questions about FINRA Rule 2080 (Expungement) That means complaints filed by customers about investment-related sales practices. Regulatory actions by FINRA or the SEC, criminal disclosures, bankruptcy filings, liens, and judgments are not covered. A state sanction or a FINRA suspension stays on BrokerCheck regardless of what an arbitration panel decides about a customer complaint.
Employment termination disclosures on Form U5 follow a separate track through intra-industry arbitration and are not part of the customer-dispute expungement process described here.2Financial Industry Regulatory Authority. Regulatory Notice 26-06 – FINRA Requests Comment on Modernizing FINRA Arbitration Rules, Guidance and Processes
The Three Grounds Under Rule 2080
An arbitration panel can recommend removal only if it finds that one of three narrow standards has been met, and the panel must explain in writing which ground applies and identify the specific evidence it relied on.3Financial Industry Regulatory Authority. FINRA Rule 2080 – Obtaining an Order of Expungement of Customer Dispute Information from the CRD System
Factually Impossible or Clearly Erroneous
The complaint describes something that could not have happened. The broker was not employed at the firm during the period in question, or the account referenced never existed. Clerical mistakes qualify too, like a complaint attributed to the wrong person or reflecting an incorrect settlement figure. The record has to be demonstrably wrong on its face.
Non-Involvement in the Alleged Violation
The broker was named in a complaint but had no role in the underlying conduct. This comes up at larger firms where a branch manager or supervising representative gets swept into a complaint about a specific trade they did not authorize, recommend, or discuss with the client. The broker must show no meaningful connection to the transaction or the customer relationship at issue.
The Claim Is False
The panel finds that the customer’s allegations are simply untrue. This ground is often the most contested because it pits the broker’s evidence against the customer’s version of events. Emails, trade confirmations, account statements, and contemporaneous notes are the backbone of a successful falsity argument. Panels want documentary proof, not just testimony that the claim was baseless.
Filing Deadlines
Amendments to FINRA Rules 12805 and 13805 that took effect in October 2023 imposed hard time limits on expungement requests.4Financial Industry Regulatory Authority. Regulatory Notice 23-12 – FINRA Adopts Amendments to the Codes of Arbitration Procedure to Modify the Process Relating to the Expungement of Customer Dispute Information The clock depends on whether the underlying complaint went to arbitration or litigation:
- No associated arbitration or lawsuit: file within three years of the date the customer complaint was first reported to the CRD system.5Financial Industry Regulatory Authority. FINRA Rule 13805 – Expungement of Customer Dispute Information from the CRD System
- Associated arbitration or civil litigation: file within two years after that case closes, whether by settlement, award, or dismissal.5Financial Industry Regulatory Authority. FINRA Rule 13805 – Expungement of Customer Dispute Information from the CRD System
These deadlines apply to complaints reported to the CRD after the October 2023 effective date. Miss the window and the disclosure generally stays on your record permanently. The rules contain no extension or good-cause exception.
How to File
There are two paths. If you are involved in an active customer arbitration, you can request expungement as part of that proceeding under Rule 12805. For older complaints, the more common route is a “straight-in” request under Rule 13805, filed as a standalone claim against the firm where you were associated when the dispute arose.6Financial Industry Regulatory Authority. Expungement of Customer Dispute Information The customer who filed the original complaint is not a party to a straight-in request but is notified and invited to participate.
Filing starts with a Statement of Claim submitted through the FINRA Dispute Resolution Portal. Identify the specific disclosure using the Occurrence ID from your CRD report, then lay out a detailed narrative explaining how the record meets one or more of the Rule 2080 grounds. Vague or conclusory statements will not carry the claim. The narrative should walk the panel through the facts and point to the evidence you plan to present.
What It Costs
FINRA filing fees scale with the amount of the underlying customer claim. Small claims up to $1,000 carry a $50 fee. A claim involving $25,000 to $50,000 is $525. Claims over $1 million cost $2,540 or more.7Financial Industry Regulatory Authority. FINRA Rule 12900 – Fees Due When a Claim Is Filed Hearing session fees apply each time the panel convenes, running from $50 per session for the smallest claims to over $2,000 per session for large cases before a three-arbitrator panel.8Financial Industry Regulatory Authority. FINRA Rule 12902 – Hearing Session Fees, and Other Costs and Expenses Attorney fees are separate and typically run $7,500 to $15,000 for a straightforward case. Total out-of-pocket costs for a routine expungement generally land between $10,000 and $20,000.
The Arbitration Hearing
Straight-in expungement requests go before a three-person panel drawn from FINRA’s Special Arbitrator Roster. To sit on that roster, an arbitrator must be a public arbitrator eligible for the chairperson roster, have completed FINRA’s enhanced expungement training, and have served through award on at least four customer arbitrations where a hearing was held.9Financial Industry Regulatory Authority. Expungement Training, Education and Workshops for FINRA Arbitrators
FINRA notifies the customers whose complaints are subject to the request. They can attend the hearing, introduce evidence, testify, and cross-examine the broker.10Financial Industry Regulatory Authority. FINRA Rule 12805 – Expungement of Customer Dispute Information from the CRD System If the customer does not appear, the panel cannot treat that absence as evidence supporting expungement.5Financial Industry Regulatory Authority. FINRA Rule 13805 – Expungement of Customer Dispute Information from the CRD System The broker still has to meet the full evidentiary standard.
The hearing is conducted by video or teleconference and recorded. The broker testifies under oath and answers questions from the panel. The panel has broad authority to request documents from both the broker and the former firm, including compliance records and internal communications. If a settlement resolved the underlying dispute, the panel must review the settlement documents, including payment amounts and whether the settlement was conditioned on the firm agreeing not to oppose expungement.5Financial Industry Regulatory Authority. FINRA Rule 13805 – Expungement of Customer Dispute Information from the CRD System
All three arbitrators must agree unanimously that at least one Rule 2080 ground has been established.4Financial Industry Regulatory Authority. Regulatory Notice 23-12 – FINRA Adopts Amendments to the Codes of Arbitration Procedure to Modify the Process Relating to the Expungement of Customer Dispute Information The written award must identify the ground, explain the reasoning, and specify the evidence relied on. A split decision means denial.
Court Confirmation
A favorable arbitration award does not remove anything on its own. Under Rule 2080, the broker must petition a court of competent jurisdiction to confirm the award or issue an order directing expungement. You must either name FINRA as an additional party and serve them with the filings, or request that FINRA waive that requirement.3Financial Industry Regulatory Authority. FINRA Rule 2080 – Obtaining an Order of Expungement of Customer Dispute Information from the CRD System
FINRA will typically waive the naming requirement when the arbitration award contains the proper findings: a specific Rule 2080 ground identified, a written explanation, and the evidence cited.1Financial Industry Regulatory Authority. Frequently Asked Questions about FINRA Rule 2080 (Expungement) When the waiver is granted, the confirmation usually moves without opposition. Court filing fees vary by jurisdiction but are typically a few hundred dollars, plus service of process costs.
Once the court signs the confirmation order, serve it on FINRA’s Office of General Counsel. Their legal staff verifies the order against the arbitration findings, and upon approval the disclosure is removed from both the CRD and the public BrokerCheck website.
State Regulators May Keep Their Own Records
Successful expungement removes the disclosure from BrokerCheck, but it does not necessarily clear your record with every state securities regulator. Forms U4 and U5 are filed with individual states in addition to FINRA, and the North American Securities Administrators Association has taken the position that state regulators have a direct proprietary interest in CRD data and are not bound by arbitration awards to which they were not parties.11North American Securities Administrators Association. NASAA Comment Letter re FINRA Regulatory Notice 26-06 Whether a state independently retains or removes the information depends on its own record-retention laws. The amended rules now require FINRA to notify state securities regulators of expungement requests so they can participate, but the underlying tension remains. If you hold licenses in multiple states, plan for the possibility that some records may persist at the state level.
If the Panel Denies the Request
A denial is essentially final. Under Rule 13805, once a panel has held a hearing on the merits and denied the request, you cannot file another expungement claim for the same disclosure.5Financial Industry Regulatory Authority. FINRA Rule 13805 – Expungement of Customer Dispute Information from the CRD System The same bar applies if a court has previously denied expungement of the same information. Withdrawing a pending request does not preserve your options either, because the panel must deny with prejudice.
The only avenue after an adverse award is petitioning a court to vacate it under Section 10(a) of the Federal Arbitration Act. The statutory grounds are narrow: corruption or fraud in obtaining the award, evident partiality by the arbitrators, arbitrator misconduct, or the arbitrators grossly exceeding their authority. Disagreement with how the panel weighed the evidence is not enough. Courts give arbitration awards significant deference, and vacatur is rare. You get one real shot at expungement, which is why preparation before the hearing decides most cases.