FINRA RULE 8312 REVIVES HISTORICAL COMPLAINTS FOR BROKERCHECK PURPOSES

FINRA RULE 8312 REVIVES HISTORICAL COMPLAINTS FOR BROKERCHECK PURPOSES

The SEC has approved FINRA’s proposed amendments to Rule 8312, which deal with BrokerCheck. These new amendments took effect August 23, 2010. The newly vamped BrokerCheck service will include several changes which has an adverse impact on registered representatives.

This change revives for BrokerCheck purposes customer complaints that were settled for a nominal amount ($10,000.00 prior to May 18, 2009 and $15,000.00 after May 18, 2009) which rolled off their U-4 after two (2) years. This change in effect will cause all customer complaints to stay on the BrokerCheck system forever absent a successful expungement challenge.

The second major change is that a former registered representative’s information will remain publicly available via BrokerCheck for a period of ten (10) years instead of two (2). This allows the information to remain publicly available for a longer period of time even if the individual remains unaffiliated with a member entity.

Rule 8312 all but eliminates the ability of a respondent in an arbitration to resolve customer complaints for nuisance value with the claim rolling off the broker’s record. Looks like PIHBA has pushed another rule through that benefits claimants at the detriment of FINRA members and associated persons.