HF 648 (LSB 1840HV (1) 90)

HOUSE FILE 648

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO HSB 213)

A BILL FOR

An Act providing for the expungement of information regarding investment advisers and investment adviser representatives authorized to do business in this state.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  502.511  Investment advisers and investment adviser representatives —— expungement of certain reported information.
   1.  An investment adviser authorized to do business in this state under this chapter, including as provided in section 502.403, or an investment adviser representative authorized to do business in this state under this chapter, including as provided in section 502.404, may petition the district court sitting in equity to expunge information in a record controlled by the financial industry regulatory authority.
   2.  The commissioner of insurance shall be the respondent in the proceeding. If the record described in subsection 1 includes confidential information that was part of a judicially enforceable arbitration decision, the party to the arbitration proceeding who reported the information to the financial industry regulatory authority shall also be a respondent in the proceeding.
   3.  The district court may grant relief by ordering the expungement of the information in the record described in subsection 1, if all of the following apply:
   a.  The information makes an allegation about the investment adviser or investment adviser representative.
   b.  The information has been publicly disclosed.
   c.  Any of the following apply:
   (1)  The petitioner was not involved in the event that resulted in the creation of the record.
   (2)  The information in the record is erroneous or impossible to be true.
   (3)  The information in the record is defamatory.
   d.  A decision in an administrative, judicial, or arbitration proceeding found that the petitioner did not act in a manner described by the record.
   e.  The court determines that equitable principles require that such relief be granted.
   4.  If a court grants relief under this section, the information in the record and any copies of the record shall be destroyed.
   5.  Notwithstanding section 614.1, a petition may be filed and relief granted as provided in this section at any time.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that a person who is an investment adviser, or an investment adviser representative, authorized to do business in this state under Iowa’s blue sky law, including by satisfying certain registration requirements under Code section 502.403 or 502.404, may petition the district court sitting in equity for relief in the form of ordering the expungement of information in a record controlled by the financial industry regulatory authority (FINRA). The respondents in the case must include the commissioner of insurance and any party to a judicially enforceable arbitration proceeding who reported the information to FINRA. The district court may grant the relief by ordering the expungement of the information under certain conditions, including: the petitioner was not involved in the event that resulted in the creation of the record; the information is erroneous, impossible to be true, or defamatory; a decision in an administrative, judicial, or arbitration proceeding found that the petitioner was not liable for acting in a manner described in the record; or the court determines that equitable principles require such relief. The statute of limitations or the doctrine of laches does not apply.