Expungement of information related to settled customer dispute arising out of complaint not made by customer or person authorized to act on customer’s account.

The FINRA arbitrator made a ruling pursuant to FINRA Rule 2080 that the customer’s claim, allegation, or information was factually impossible or clearly erroneous. The complaint, an “inquiry” as to whether a trade was made, was made by the customer’s daughter, who was neither the customer nor a person authorized to act on her account and so did not meet the reporting requirements of FINRA Rule 4513. Further, the “inquiry” did not involve a claim for damages of $5,000 or more, which is the minimum required by FINRA Rule 4530 for a matter to be recorded on a broker’s record. FINRA member firms should carefully consider the reporting requirements of applicable FINRA rules before reporting unwarranted customer complaints on their associated persons’ CRD. 

^{Case Law Alerts, 1st Quarter, January 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2022 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}