Notes

Disclosure Expungement
Disclosure expungement refers to the process of removing a lawsuit from the court and getting the suit dismissed. The process is started by filing an application with the courts. A complaint about the legal claims being made is submitted to the court, along with documentation of personal injury litigation, bank statements, paycheck stubs, etc. The complaint is denied at first review, when the applicant (complainant) requests an unconditional ruling, stating that the complaint is barred by the First Amendment and that it would prejudice the public's right to sue. U4 or U5 certification is then requested, which means that the U4 or U5 claim must be shown to be likely supported by a preponderance of the evidence (a higher percentage of probability than for the opposition, which the courts require dismissing the case).

If the U4 or U5 claim is found to be likely supported by the preponderance of the evidence, and therefore can be granted unconditional approval, then the complaining parties can go to discovery and submit additional information to the court, as required. This additional information usually involves communications from the customer to the consultant, or from the customer to the consultant and the party filing the lawsuit, respectively. Once FINRA Disclosure expungement have provided the court with the required information, they will submit documents and records relating to the customer disputes to the consultant. The court will review these documents and determine whether the complaint meets the strict and time-consuming requirements of ERISA and the Uniform Dispute Resolution Procedures Act (USDPA). If either requirement is met, the case will be denied access to the courts and the UFJ system.

In most cases, the UFJ is the appropriate action. If the UFJ is denied access to the courts, the company has the option to seek admission to the ERISA and USDPA systems or to file a complaint in federal district court. It is in the discretion of the company's legal representative to choose any one of these methods.

However, there are occasions when the company may face an internal conflict between the desire to preserve the information contained within the documents, and the desire to resolve the claims that arose out of those documents. Such conflicts often arise when legal representatives are asked to carry out two different roles at the same time. For instance, it may be necessary for one legal representative to prepare the complaint and reply to discovery requests, while another legal representative is engaged in negotiating the terms of a settlement. In such cases, both legal representatives must abstain from participating in the settlement process, unless they first obtain the consent of the other party. Similarly, a third party must give its consent before a legal representative will engage in negotiations of a settlement.

There are times when a company must proceed with litigation in response to a notice of disclosure expungement. When this action is taken, the company must first determine whether the local or state laws regarding disclosure expungement apply to the situation. If they do, then they must decide if the plaintiff is a party to the lawsuit and, if so, how much relief the court would grant the company.


Disclosure expungement processes vary greatly depending on the jurisdiction in which they are applied. Some states allow for expungement in certain circumstances, while others prohibit it outright. Again, it is in the discretion of the legal representatives of the company to determine what process they wish to pursue. It is important, however, that legal representatives abide by the laws of the state in which they work.

Read More: https://mahadvising.com/services/finra-actions/disclosure-expungement/