FINRA, the securities industry self-regulatory organization formerly known as NASD, maintains public records of securities brokers or agents’ disciplinary records. Flowers, a former securities broker, with a disciplinary record sued FINRA to compel it to expunge his disciplinary history from its records. This decision affirms a judgment dismissing the action, finding that the suit was precluded by Flowers’ failure to exhaust the administrative remedy that FINRA provides. Also, the decision finds that prosecution of a state court action to compel expungement is preempted by its conflict with federal securities laws which require publication of the disciplinary records of securities brokers and agents.
California Court of Appeal, Fourth District, Division One (Benke, J.); October 20, 2017; 2017 WL 4992801.