Washington, D.C. partners Ryan Duffy and Kathleen Warin secured two significant victories in the U.S. District Court for the District of Columbia on behalf of the Financial Industry Regulatory Authority (FINRA). In two separate cases, former securities brokers sought to expunge customer dispute information from their registration records maintained by FINRA in the Central Registration Depository (CRD) system, which is publicly available through BrokerCheck as required under the Securities Exchange Act of 1934. The plaintiffs each asserted claims for equitable expungement, declaratory judgment, and a permanent injunction.

In both cases, the Wilson Elser team successfully argued that the plaintiffs failed to identify any cognizable cause of action against FINRA that would entitle them to expungement relief. Ryan and Kathleen demonstrated that neither the Exchange Act nor FINRA Rules create a private right of action against FINRA for expungement of customer dispute information from the CRD, and that the plaintiffs' claims for equitable relief, declaratory judgment, and a permanent injunction were remedies rather than cognizable causes of action.

Both courts agreed in full, granting FINRA's motions to dismiss with prejudice. They held that the Exchange Act's comprehensive regulatory scheme does not authorize private suits against FINRA for actions taken pursuant to its statutory obligations, and that federal courts have overwhelmingly declined to recognize any such private right of action. The courts also rejected the plaintiffs’ arguments that their inherent equitable powers could supply the missing cause of action, reaffirming the well-established principle that equitable expungement, declaratory relief, and injunctive relief are forms of remedy ‒ not independent sources of legal entitlement.

Together, these decisions provide critical legal authority and reinforce that brokers have no private right of action against FINRA for expungement of customer dispute information maintained pursuant to its statutory obligations.