As we have been continuing to report since December 6th, 2017, FINRA has proposed changes to gut the expungement process for financial professionals who seek expungement of meritless customer complaints under Rule 2080.
As we only represent the financial advisor, we talk to thousands of reps, nearly all of whom are enraged at the prospect of losing basic due process under the FINRA arbitration rules. Whether you currently have a meritless customer dispute, fear allegations being indiscriminately lobbed at you in the future, or simply wish to retain the basic American rights of "innocent until proven guilty" you should read our formal response to FINRA pointing out the problems with these new measures.
Including, and not the least of which is, FINRA's assertion that any customer dispute disclosures over 12 months old will NOT BE ELIGIBLE FOR ANY REMEDY under the new arbitration rules.
Aged false, erroneous, impossible and defamatory customer claims against you and your business will be permanent on your CRD and BrokerCheck profile.
Monday, February 5th, was the end of the comment period. Now we wait on the decision of a "self-regulatory" organization that has done little to protect the livelihood of their own financial professionals.
Armin Sarabi, J.D.
As we barrel into 2018, many financial advisors are fielding calls about year-end tax implications for their clients. Not only on what deductions to squeeze into 2017 but on how the recently-passed Republican tax plan (calculator here) may affect their taxes for next year versus this year.
Prudent financial advisors considering FINRA Investor Dispute expungement or other legal/arbitration services may want to take a moment to review their own tax implications as well in the coming days.
If you received income via 1099 as a sub-contractor (Schedule C), you may likely have the ability to deduct expenses for FINRA CRD expungement cases directly as a legal expense.
Alternatively, if you are an employee paid wages via W-2, then you may be able to itemize your legal expenses (Schedule A) if it's for matters that help you produce income. You can learn more from IRS Publication 529 on the tax limits involved (2% of AGI). Obviously, you should always consult your tax accountant for a final say.
With the recent proposed rule changes from FINRA looking to shut the door on Investor Complaint expungement from your Form U4, as well as the possible tax advantages given the new plan, it's imperative for advisors to take a little time this week to ensure they are spending their own money wisely on defending their good name.
Senior Business Development Manager
This blog is our ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.