Quick Answer
Written customer complaints are kept at each Office of Supervisory Jurisdiction (OSJ) for at least 4 years, with per-event reports due in 30 days and a quarterly statistical roll-up due by the 15th. Regulatory discipline runs through FINRA investigations and the Code of Procedure; private disputes run through the Code of Arbitration (binding) and the Code of Mediation (voluntary, non-binding).
The whole unit on one sheet: what firms keep and report, how discipline flows, and the arbitration-versus-mediation lines the exam loves.
The One-Liners That Win Points
- Code of Procedure = FINRA's internal disciplinary court (Department of Enforcement prosecutes, Hearing Panel tries, National Adjudicatory Council hears appeals).
- Code of Arbitration = binding resolution of monetary and industry disputes; the award is final and enforceable.
- Code of Mediation = voluntary, non-binding settlement facilitation; the mediator facilitates but never decides.
- Customers have a unilateral right to compel FINRA arbitration, even with no predispute agreement; a member cannot compel a customer without a signed predispute agreement.
- Industry disputes (compensation, defamation on Form U5, branch separations) MUST be arbitrated; a predispute clause waiving that forum is itself a violation.
- Expungement takes TWO steps: an arbitration panel finding under one of three standards PLUS court confirmation. FINRA does not remove Central Registration Depository (CRD) entries on its own.
- Bar = for associated persons (APs); expulsion / revocation = for member firms. Do not swap the terms.
Numbers to Lock In
| Item | Value |
|---|---|
| Written complaint retention at the OSJ | at least 4 years |
| Per-event report (theft / forgery, regulatory action, settlement, statutory disqualification) | within 30 days of firm knowledge |
| Internal-conclusion report | within 30 days of the firm's conclusion |
| Quarterly statistical report deadline | by the 15th of the month after quarter-end |
| Per-event settlement threshold | over $15,000 (registered person) / over $25,000 (firm) |
| FINRA jurisdiction over former APs | 2 years after termination of registration |
| Failure-to-respond escalation | suspension, then a bar after 90 days of non-compliance |
| Form U5 disclosure release | 3 business days after FINRA processing |
| Censure floor | skip censure if total sanctions are $5,000 or less |
| Appeal window to the National Adjudicatory Council | 25 days after service of the decision |
| Simplified arbitration threshold | $50,000 or less (excludes interest and expenses) |
Top Gotchas
- Procedure vs Arbitration vs Mediation is the classic trap. Procedure = FINRA disciplines you; Arbitration = binding monetary dispute; Mediation = voluntary, mediator cannot impose terms.
- The complaint retention floor is 4 years, not 3. The Securities Exchange Act books-and-records floor is 3 years, but the longer FINRA period controls.
- Theft / forgery complaints hit BOTH reports. They trigger a 30-day per-event report AND the quarterly roll-up; an excessive-trading complaint is quarterly-only.
- The $15,000 / $25,000 figure is the settled or adjudicated amount, not the size of the original demand.
- Expungement is not granted by FINRA. A panel must make an affirmative finding (factually impossible or clearly erroneous, not involved, or false); a dismissal or below-threshold settlement is not enough, and court confirmation is still required.
- Failure to respond to a FINRA information request is its own violation, and the sanction is usually a bar even if the underlying matter would have produced nothing.
- The National Adjudicatory Council can INCREASE sanctions on appeal. Appellate risk runs both ways.
- Mediation does NOT stay a pending arbitration unless the parties expressly agree; deadlines keep running.
- Simplified arbitration is paper-only by default, but in a customer case only the customer can demand a hearing.
One-Breath Recap
Firms keep written customer complaints at the OSJ for at least 4 years, file per-event reports within 30 days (theft or forgery, regulatory actions, settlements over $15,000 for a registered person or $25,000 for the firm, statutory disqualifications), and file the quarterly statistical roll-up by the 15th of the month after quarter-end. Regulatory discipline flows through FINRA investigations (2-year tail over former APs, sanctions menu, refuse-to-respond bar) into the Code of Procedure (Hearing Panel decides by majority, 25-day appeal to the National Adjudicatory Council, then FINRA Board, SEC, and the courts). Private disputes split into binding arbitration (customer's unilateral right, non-waivable industry mandate, $50,000-or-less simplified track) and voluntary, non-binding mediation that never stays a pending arbitration. Expungement stays narrow: an arbitration finding under one of three standards plus court confirmation. Keep Procedure, Arbitration, and Mediation straight and this unit answers itself.
Need more than the recap? Read the full Disciplinary Actions and Customer Disputes unit.