NASD Notice to Members 99-09 - February 1999

NASD Regulation Imposes Moratorium on Arbitrator-Ordered Expungements of Information from the Central Registration Depository

Executive Summary

NASD Regulation, Inc. (NASD RegulationSM) is imposing a moratorium on expungement of certain information from the Central Registration Depository (CRDSM) that is ordered by arbitrators. Effective January 19, 1999, NASD Regulation will not expunge information from the CRD system based on a directive contained in an arbitration award rendered in a dispute between a public customer and a firm or an associated person, unless the award has been confirmed by a court of competent jurisdiction. Therefore, arbitration awards rendered in such disputes that contain expungement directives that are not final (i.e., those awards that have not been signed by a majority of the arbitrators) on or before January 19, 1999, must be confirmed by a court of competent jurisdiction before NASD Regulation will execute the expungement directive. During this moratorium, NASD Regulation will continue to execute court-ordered expungements, including expungement orders contained in an arbitration award that is confirmed by a court of competent jurisdiction. In addition, NASD Regulation will continue to expunge information from the CRD system based on expungement directives in arbitration awards rendered in disputes between firms and current or former associated persons, where arbitrators have awarded such relief based on the defamatory nature of the information.

 

Questions concerning this Notice may be directed to Ann E. Bushey, Assistant Director, CRD/Public Disclosure, NASD Regulation, at (301) 590-6389; Mary M. Dunbar, Assistant General Counsel, Office of General Counsel, NASD Regulation, at (202) 728-8252; or Richard E. Pullano, Associate Director and Counsel, CRD/Public Disclosure, NASD Regulation, at (301) 212-3789.