1. When a party is contesting a court order, it must first attempt to obtain a judgment in its favor. If it cannot, then it must either accept the court's ruling on an out-of-court settlement or file a motion to seek u5 expungement . A party may request the courts to seal all records pertinent to the action, except for those items specifically exempted by the rules of the court. A judge will typically enter a written request for seal, which can be accompanied by a certification that the documents are exempt from public access. The party must demonstrate to the court why the contents of the sealed documents should remain confidential, such as to protect the identity of a confidential witness.
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3. Once the court decides to seal the documents, anyone can apply to the appropriate FINRA U4 Expungement coordinator. All requests for u4 expungement are processed according to the rules set forth by FINRA. However, the U4 process may be slower than other methods of expungement because brokers cannot be asked to disclose or make available prior restraint information or non-public information. In addition, the brokers must inform the courts of their intention to seek an expungement and provide additional evidence of the claim.
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5. An arbitrator may expunge or seal the documents, if the dispute is one that does not involve any monetary damages. Expunging a civil wrongdoer from damages is referred to as "punitive damages," while sealing civil wrongs is referred to as "adjudication" or "amicus." The types of actions that may be expunged include civil fraud, civil slander, and false arrest or prosecution. FINRA has provided the following examples of instances in which it may expunge a civil proceeding: Any action in which the plaintiff was not a party to the action, any information or records that were not open to public inspection, any preponderance of the evidence, any crime, any witness, any revelation that is intended to hinder the effectiveness of a deposition, any fraud or deception, and any other civil or criminal actions or allegations.
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8. Rule 8, paragraph (c) of the AEA states that, in the case of a complaint that does not specify a remedying exception, if the complaint does not relate to any aspect of fraud, deceptive activity, or the concealment of information, then the complaint is deemed to include a statement of defense that may be submitted to the arbitrator as part of the expungement proceedings. In the majority of cases, the initial arbitration panel must determine whether the complaint contains a statement of defense. If it does, the panel must make a finding as to whether the statement of defense satisfies the requirements of the securities laws and regulations. Only after satisfying the panel and the regulations of FINRA may the complaint be submitted to the FINRA U4 process for expungement.
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10. In order to apply for an expungement, the procedures in form u5 must be followed. The applicant must submit a request to the FINRA under the appropriate form. The request must state why the investor would like the statement of defense or arbitration released and must also attach any other documents that support the claim. Form u5a is similar to the form u5 but the document is used for requests of a minor stockholder. After approval, the document can then be sealed by the court and delivered to the investor for signing.
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12. Homepage: https://mahadvising.com/services/finra-actions/disclosure-expungement/