Following a recent U.S. Court of Appeals ruling, financial advisors will continue to find it difficult to purge their Central Registration Depository records of consumer complaint information following a settlement agreement. This makes it all the more important for them to act proactively to prevent complaints in the first place.

In its Karsner v. Lothian ruling, the appeals court reversed a lower court decision that prohibited the State of Maryland from intervening in a stockbroker’s attempt to have a complaint purged from his CRD record. The state attempted to intervene in order to preserve its statutory ability to review license applications and determine advisor fitness to do business in the state.

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