SEC Bans FINRA Deals Requiring Record Expungements

Law360, New York (July 23, 2014, 5:29 PM EDT) -- The U.S. Securities and Exchange Commission has approved a securities industry rule that bans arbitration settlements between brokers and investors that require the investor to consent to erase the complaint from the public record, according to a notice posted Wednesday.

The agency has adopted the proposal by the Financial Industry Regulatory Authority, which has long been concerned about the practice of conditioning settlements on agreements to expunge investor claims from the Central Registration Depository, the central licensing and registration system for the securities industry.

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