Under newly proposed expungement procedures, persons who are the "subject of" allegations of sales practice violations made in arbitration claims, but who are not named as parties to the arbitration (unnamed persons), would be permitted to seek expungement relief.  They would do so by initiating In re expungement proceedings at the conclusion of the underlying customer-initiated arbitration case.  These allegations must be reported in the same way that customer complaints are reported - to the CRD system on Forms U4 or U5. Currently, neither the Codes of Arbitration Procedure for Customer Disputes nor Industry Disputes provide unnamed persons with express procedures to seek expungement of these types of allegations. FINRA Objectives. FINRA has introduced the In re expungement rules and accompanying forms to provide unnamed persons with a remedy to seek redress concerning allegations that could otherwise impact their livelihoods.  At the same time, the new rules maintain the protections of FINRA’s expungement rules to ensure the integrity of the CRD records. Comment Period for Proposal. FINRA requests comments on its proposal - no later than 5/21/12.  The proposed procedures are covered in the following rules:

• Rule 12100(z) (Unnamed Person);
• Rule 12806 (Expungement of Customer Dispute Information by Persons Named as Parties);
• Rule 13100(cc) (Unnamed Person);
• Rule 13806 (Expungement of Customer Dispute Information by Persons Named as Parties); and,
• Rule 13807 (Expungement of Customer Dispute Information by an Unnamed Person).

FINRA Staff Contacts. Direct questions to: Kenneth Andrichik, SVP, Chief Counsel and Director of Mediation and Strategy, Dispute Resolution - [(212) 858-3915 or ken.andrichik@finra.org]; or Mignon McLemore, Asst. Chief Counsel, Dispute Resolution - [(202) 728-8151 or mignon.mclemore@finra.org]. For further details, go to: [RegNote 12-18, April 2012]. Note: C-I will update this posting with a summary of FINRA's voluminous notes on this proposal.