FINRA’s arbitration task force presented 51 recommendations to improve the arbitration process. Of special focus was the issue of the expungement of advisor’s disciplinary records. Hugh Berkson, president of the Public Investors Arbitration Bar Association, discussed the proposals his organization contributed to the process. The current system heavily favors the advisors, leaving their clients with the burden of fighting the expungements, Mr. Berkson explained. Additional proposed requirements include requiring the advisors to pay for their expungement proceedings, that those proceedings occur within 1 year, and allow clients to testify.
FINRA’s expungement process relies too heavily on the aggrieved investors to be fair or meaningful. The Public Investors Arbitration Bar Association, led by President Hugh Berkson, seeks reforms to shift responsibility to FINRA and allow the clients to testify at the hearings.