U-4/U-5 Expungements

In the securities industry, it is essential for a broker to keep their record with the Central Registration Depositary (“CRD”) as clean as possible from customer complaints and other negative disclosures. The CRD is the central licensing and registration system for the U.S. securities industry and its regulatory agencies. There are certain events that trigger firms filing a Form U-4 for its current registered representatives and Form U-5s for terminated registered representatives. For example, when a firm terminates a registered representative it is required to complete a Form U-5 indicating the basis for termination. Both financial firms and industry professionals are required to amend their Form U-4/U-5s when certain reportable events occur. Depending on the nature of that event, the time to file an amended Form U-4/U-5 may be as little as 10 days. Failing to timely file an amended Form U-4/U-5 is a violation of FINRA rules and may result in disciplinary actions by the FINRA Department of Enforcement.

Lax & Neville LLP represents registered representatives in negotiating Form U-4 and Form U-5 language with firms prior to filing, or in arbitrations seeking expungement of Form U-4s and U-5s containing false and defamatory information. It is essential for a registered representative to have their record with CRD contain accurate information since false information may ultimately harm their business and prevent them from employment or registration at the brokerage firm of their choice. Our attorneys understand the importance of brokers’ maintaining clean regulatory records, and have been successful in representing brokers in obtaining expungement relief from FINRA arbitration panels.

Unfortunately, not only do terminations sometimes result in false or defamatory disclosures by brokerage firms, but given the vast arrays of product problems that have arisen in recent years, many brokers have seen their records tarnished with numerous customer complaint disclosures arising out of product problems. Product problem investments frequently involve complex and speculative investment products that are inappropriately marketed by brokerage firms to investors. FINRA Rules 12805 and 13805 establish the procedures arbitrators must follow before recommending expungement under FINRA Rule 2080. Pursuant to FINRA Rule 2080, a broker is able to seek expungement for one of three reasons:

  1. The claim, allegation or information is factually impossible or clearly erroneous;
  2. The registered person was not involved in the alleged investment-related sales practice violation, forgery, theft, misappropriation or conversion of funds; or
  3. The claim, allegation or information is false.

Our firm has been successful in representing various brokers seeking expungement of customer complaints from their records. For example, our firm won expungement relief for a registered representative formerly employed by UBS Financial Services, Inc. who was seeking expungement of nine customer complaints from his record, and our firm won a hard fought and significant expungement relief in a case against Merrill Lynch which was notable because the arbitration panel found that Merrill Lynch’s conduct was initiated for competitive purposes. If you are a registered representative with a false or inaccurate disclosure on your record, contact Lax & Neville LLP.

Client Reviews
★★★★★
The Lax & Neville team were total professionals in handling our case. They've clearly had quite a bit of experience handling complex legal matters in many jurisdictions and courts. I was impressed with their professionalism coupled with persistence in arguing a very complete and well-structured case. I highly recommend their services. Anonymous
★★★★★
I am very, very happy with the outcome of my case and my experience with Lax Neville could not have been better. The entire team of attorneys and staff are real professionals, they always had time to answer my many questions about my case. I was treated with compassion and respect. I am so grateful I chose to work with Lax Neville. Anonymous
★★★★★
This is an official " thank you" for all your hard work. It really was a pleasure to have you represent me, and I enjoyed seeing you, Rush and Sandra in action. I think Lax and Neville epitomizes the phrase "quality vs quantity". I think I told you before that I spent a lot of time researching firms; in this case things worked out, I picked the best firm. I hope I never need your services in the future, but if I do I know I found the best attorneys for these types of legal issues. Anonymous
★★★★★
What transpired at the [redacted] was nothing less than a truly masterful and exceptional experience regarding your intelligence, professionalism, preparedness for my case, teamwork and erudite knowledge pertaining to Securities Law, FINRA and the SEC. The facility and ease of how the case was handled, the systematic questioning of all the witnesses to obtain the facts necessary to prove our case, the preparation of the critically conclusive information and documents, the commanding coup de gras closing argument and your tireless consideration and respect for the Panel and [redacted] was, is and will continue to epitomize my feelings and conclusion that what transpired over those long three days was nothing less than raw and unabashed brilliance. Anonymous
The New York Times
BusinessWeek
Dowjones Newswires
CNN Money
Forbes
The Wall Street Journal
Thomson Reuters
Super Lawyers
Securities Arbitration Commentator