Norman Thorn Robertson v. FINRA - Expungement Appeal Dismissed

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. SECURITIES EXCHANGE ACT OF 1934 Release No. 105307 / April 24, 2026 Admin. Proc. File No. 3-21982 In the Matter of the Application of NORMAN THORN ROBERTSON For Review of Action Taken by FINRA OPINION OF THE COMMISSION REGISTERED SECURITIES ASSOCIATION - REVIEW OF FINRA ACTION Associated person of FINRA member firm appealed a FINRA determination that his expungement claim was ineligible for arbitration. Held, because applicant has not shown FINRA offers the service requested by the applicant, application for review is dismissed. APPEARANCES:

Austin Davis of HLBS Law for Norman Thorn Robertson.

Michael Garawski, Michael Smith, and Megan Rauch for FINRA.

Appeal filed: July 22, 2024 Last brief received: November 18, 2024

Norman Thorn Robertson, an associated person of a FINRA member firm, seeks review of FINRA's determination to deny him access to its arbitration forum to bring his claim to expunge information about a prior regulatory action taken against him from his Central Registration Depository ("CRD") records. Robertson sought the Commission's review of that decision under Section 19(d) of the Securities Exchange Act of 1934, which as relevant here authorizes the Commission to review a FINRA action that "prohibits or limits any person in respect to access to services offered by [FINRA]." Because Robertson has not shown FINRA 1 offers the service that he complains FINRA denied him--use of its arbitration forum to expunge information about a regulatory action against him from his CRD--we lack statutory authority to review Robertson's application.

1. Background Robertson entered the securities industry in 1987 and was associated with a FINRA member firm at the time he filed this application for review. In August 1994, FINRA's predecessor, the National Association of Securities Dealers ("NASD"), found that Robertson had violated its rules by signing two letters that falsely represented the assets in a brokerage account. According to NASD, Robertson's friend and former colleague had requested the letters in connection with a real estate transaction, and Robertson knew or should have known the letters were false and misleading. NASD censured Robertson, suspended him from associating with any NASD member for 90 days, fined him $20,000, and ordered that he requalify by examination. Robertson did not appeal NASD's action to the Commission. Five years later, in 1999, NASD filed a Form U6 disclosing this regulatory action in the CRD, which is a computerized database that contains information about broker-dealers and their 2 representatives, including regulatory action information. The CRD cannot be accessed by the 3 general public. However, FINRA provides a free online tool, called BrokerCheck, which 4 displays some of the CRD's information, including regulatory action information, and is available at http://brokercheck.finra.org. 5 In June 2024, Robertson filed a statement of claim in FINRA's arbitration forum requesting the expungement of all information from the CRD and BrokerCheck related to NASD's 1994 regulatory action against him. On July 1, 2024, FINRA denied his use of its arbitration forum, finding his claim ineligible for such forum under FINRA Rule 12203(a) or 13203(a). These rules provide that the Director of FINRA Dispute Resolution Services may 15 U.S.C. § 78s(d). 1 Robertson's firm also reported the regulatory action to the CRD. 2 See Michael Andrew DeMaria, Exchange Act Release No. 97511, 2023 WL 3529972, 3 at *2 (May 16, 2023). See Order Approving a Proposed Rule Change to Adopt FINRA Rule 2081, Prohibited 4

Conditions Relating to Expungement of Customer Dispute Information, Exchange Act Release

No. 72649, 79 Fed. Reg. 43809, 43809 (July 28, 2014). See, e.g., id. at 43809-10 (describing BrokerCheck and its relationship to the CRD); 5 FINRA Rule 8312 (describing the information released on BrokerCheck).

deny access to FINRA's arbitration forum if the Director determines that "the subject matter of the dispute is inappropriate" based on FINRA's purposes and the intent of the relevant FINRA Arbitration Code. FINRA determined that the subject matter was inappropriate for arbitration 6 because it sought to expunge information about a regulatory action. Robertson seeks Commission review under Section 19(d) of FINRA's decision to deny his use of its arbitration forum.

1. Analysis Exchange Act Section 19(d) provides us with statutory authority to review actions taken by a self-regulatory organization ("SRO") such as FINRA only in specific circumstances. As 7 relevant here, the Exchange Act allows the Commission to review an SRO action that "prohibits or limits any person in respect to access to services offered by [that SRO]." The Commission 8 has consistently held that, by its terms, Section 19(d) thus provides the Commission with statutory authority to review only an SRO's failure to provide access to a service "offered" by that SRO. As the party seeking Commission review, Robertson must establish that we have 9 authority to review his application. Robertson has not done so. 10 The service that Robertson requests is access to FINRA's arbitration forum to expunge information from the CRD about the NASD regulatory action. But Robertson points to nothing in FINRA's rules that provide such a service, nor can we find any such basis. Indeed, the Commission dismissed a similar application for review where an associated person had sought access to FINRA's arbitration forum to expunge regulatory action information. In concluding that the applicant had not established FINRA offered such a service, the Commission observed that FINRA's rules provide procedures for using its arbitration forum to expunge certain

customer dispute information, but contain no procedure for using the arbitration forum as a

FINRA Rules 12203(a), 13203(a); see also FINRA Rules 12100(h), 13100(h) (defining 6 the applicable FINRA Arbitration "Code"); FINRA Rules 12100(m), 13100(m) (defining the FINRA "Director"). 15 U.S.C. § 78s(d)(1)-(2). 7 Id. Robertson does not contend that any of the other bases for Commission review under 8 Section 19(d) apply to his application for review (i.e., review of a final disciplinary sanction, denial of membership, or bar from association). We therefore do not consider those bases here.

See, e.g., Jonathan Edward Graham, Exchange Act Release No. 89237, 2020 WL 3820988, at

*3 n.13 (July 7, 2020) (not reaching "alternate bases for Commission review" where applicant did not contend that those bases applied); cf. Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 809 n.6 (1986) ("Jurisdiction may not be sustained on a theory that the plaintiff has not advanced."). See e.g., Graham, 2020 WL 3820988, at *3; John Boone Kincaid III, Exchange Act 9 Release No. 87384, 2019 WL 5445514, at *3 (Oct. 22, 2019). See DeMaria, 2023 WL 3529972, at *3 & n.24 (collecting cases). 10

means to expunge information about previous regulatory actions taken against someone. As 11 the Commission also observed, FINRA guidance documents similarly provide general statements about how associated persons can expunge certain intra-industry dispute information through FINRA's arbitration forum, but longstanding FINRA guidance states that regulatory actions

cannot be expunged via FINRA arbitration. 12 That is still the case with FINRA's rules and guidance, and Robertson does not provide any examples of FINRA's ever having provided access to its arbitration forum to expunge regulatory information from the CRD. Instead, Robertson provides examples of FINRA's allowing arbitration for expungement of customer dispute information and information about why a firm terminated an associated person, and an example of FINRA itself (rather than a FINRA arbitrator) expunging a criminal disclosure from the CRD after a court expunged the relevant criminal charge. But none of his examples are of FINRA's allowing use of its 13 arbitration forum to expunge information about regulatory actions against members or associated persons. Robertson claims that FINRA should nevertheless allow him to access its arbitration forum by citing FINRA's mandatory arbitration provisions, Rule 13200(a), which provides that arbitration is the sole avenue for resolving a dispute that "arises out of the business activities of a member or an associated person and is between or among . . . Members and Associated Persons." While Robertson named his firm as respondent in his statement of claim, 14 Robertson's claim is not ultimately seeking to resolve a dispute "between or among" him and his firm. Rather, Robertson challenges NASD's bases for bringing, deciding, and then reporting the regulatory action against him, and he seeks relief from FINRA to expunge all information about the NASD regulatory action against him from the CRD--including the information entered by Id. at *3-4 (finding that DeMaria had not established that FINRA offered the service of 11 allowing access to its arbitration forum to expunge regulatory action information). Robertson argues that DeMaria is not binding here, but even if that were true, we find its analysis of FINRA's rules and guidance instructive. Robertson also states in his reply brief that Jarkesy v. SEC, 603 U.S. 109 (2024) stands for the proposition that "when there are allegations of fraud, the 7th amendment is triggered and the right to a jury trial is enshrined," but he does not explain how this proposition applies to his request to use FINRA arbitration to expunge regulatory action information from the CRD, nor do we see any basis for applying that decision here. DeMaria, 2023 WL 3529972, at *4 (citing John Nachmann, Limitations on the Types of 12

Disclosure Events That May Be Expunged From the Central Registration Depository Through Arbitration, The Neutral Corner, Vol. 4, 2013, at 8-9,

https://www.finra.org/sites/default/files/Publication/p410646.pdf (specifying that regulatory information is "ineligible for expungement from the CRD system through arbitration")). Robertson filed a motion seeking to supplement the record with exhibits demonstrating 13 these examples. In the exercise of our discretion, we grant Robertson's motion to adduce this additional evidence. Rule of Practice 452, 17 C.F.R. § 200.452 (providing for motions to adduce additional evidence). FINRA Rule 13200(a) (emphasis added). 14

NASD itself. We thus find no basis for concluding that FINRA Rule 13200(a) requires FINRA to allow Robertson to access its arbitration forum to expunge the NASD regulatory information. Nor can we find any other basis for concluding that FINRA denied him access to a service that it offers. Robertson argues that this result is inconsistent with the examples he cites above where FINRA allowed access to its arbitration forum to expunge information in other contexts and that FINRA should offer the requested service. But Section 19(d) permits us to review only denials of access to services "offered" by the SRO, not services that the SRO should offer. Moreover, 15 contrary to Robertson's arguments, Exchange Act Section 15A(b)(6)'s general statements that an SRO's rules must be "designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, . . . and, in general, to protect investors and the public interest" neither explicitly nor implicitly require FINRA to allow arbitration of requests to expunge regulatory action information. 16 Since Robertson has not established that FINRA failed to provide access to a service that it offers, we do not have statutory authority to consider his application for review. Because we 17 lack a statutory basis to review Robertson's application, we do not consider Robertson's arguments on the underlying merits of why the regulatory information should be expunged or why FINRA's action should otherwise be set aside. 18 We therefore dismiss the application for review. An appropriate order will issue. 19 By the Commission (Chairman ATKINS and Commissioners PEIRCE and UYEDA). Vanessa A. Countryman Secretary

Cf. Graham, 2020 WL 3820988, at *4 ("Even if Graham were correct that he has no 15 other venue for relief, that would not confer jurisdiction where Congress has not authorized it."). 15 U.S.C. § 78o-3(b)(6); DeMaria, 2023 WL 3529972, at *8. 16 Cf. Loftus v. FINRA, No. 20-CV-7290 (SHS), 2021 WL 325773, at *2, *4 (S.D.N.Y. Feb. 17 1, 2021) (holding that litigant "failed to establish any legal entitlement whatsoever to" a FINRA hearing to seek expungement from the CRD of information regarding a FINRA consent order). See Kincaid, 2019 WL 5445514, at *4 (explaining that an application for review must 18 "first satisfy" the requirements in Section 19(d) "before the Commission can review the action under Section 19(f)" (citing 15 U.S.C. § 78s(d), (f))). We have considered all of the parties' contentions. We have rejected or sustained them 19 to the extent that they are inconsistent or in accord with the views expressed in this opinion.

UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 105307 / April 24, 2026 Admin. Proc. File No. 3-21982 In the Matter of the Application of NORMAN THORN ROBERTSON For Review of Action Taken by FINRA ORDER DISMISSING APPLICATION FOR REVIEW OF ACTION TAKEN BY REGISTERED SECURITIES ASSOCIATION On the basis of the Commission's opinion issued this day, it is ORDERED that this application for review filed by Norman Thorn Robertson is dismissed. By the Commission. Vanessa A. Countryman Secretary