FINRA Arbitration Analysis
What is expungement? FINRA's expungement process allows registered representatives to petition to have customer dispute disclosures removed from their CRD (Central Registration Depository) record. CRD records are publicly accessible through FINRA BrokerCheck and are frequently reviewed by investors and employers.
FINRA Rule 2080 requirements: Arbitrators may only recommend expungement if they make one of three affirmative findings: (1) the claim, allegation, or information is factually impossible or clearly erroneous; (2) the registered person was not involved in the alleged sales practice violation; or (3) the claim, allegation, or information is false.
Methodology: Expungement cases are identified by searching INDUSTRY arbitration award text for the word "expungement." Outcomes (granted/denied) are detected using pattern matching against FINRA Rule 2080 language. Cases where outcome language is ambiguous or absent are labeled "Outcome Unknown." Outcome detection covers approximately 73% of cases in testing — the remainder may require AI-assisted extraction for higher accuracy.
Note on the surge: Expungement filings increased sharply after 2017 following SEC and FINRA rule changes and increased broker awareness of the process. FINRA implemented additional requirements in 2023 (Rule 13805) requiring a three-person panel for expungement-only cases, which may affect recent trends.
All statistics are derived from automated text extraction of FINRA arbitration award PDFs. No consistent formatting standard exists across these documents — outcomes, dollar amounts, and case classifications are identified through pattern matching against raw text. Results may be incomplete or miscategorized where award language is non-standard, ambiguous, or where OCR quality is poor (common in pre-2013 scanned documents). Treat all figures as directionally informative, not authoritative.