FINRA seeks approval to expand public information on securities brokers


If the Financial Industry Regulatory Authority (FINRA) has its way, the public will know a lot more about current and former securities brokers at the click of a computer mouse.

The non-governmental regulator announced Feb. 17 that it will seek authority from the U.S. Securities and Exchange Commission “in the near future” to expand the information available through its BrokerCheck website. The site offers investors a chance to research the professional backgrounds of current and former FINRA-registered brokerages and brokers.

The proposed expansion of the site would add the number of customer complaints reported publicly, extend the public disclosure period for the full record of a broker who leaves the industry from two to 10 years and make permanent information including criminal convictions and some civil and arbitration judgments regarding former brokers.

Rick Ketchum

Rick Ketchum, FINRA’s chairman and chief executive officer, said in a statement that the proposed changes “will provide additional information to investors who are considering whether to conduct, or continue to conduct, business with a particular securities firm or broker.

“Just as important, they will provide valuable information about persons who have left the securities industry, often not of their own accord, but who can still cause great harm to the investing public,” he said. “Recent regulatory and criminal proceedings in the financial services sector reveal that former brokers have been engaging in fraud and other misconduct long after establishing themselves in other segments of the financial services industry.”

Complaint data would be available to 1999, when electronic filing of broker information began. The new data would join current BrokerCheck reports for brokers who have three or more currently disclosable regulatory actions, complaints, arbitrations, litigations or historic complaints, according to FINRA.

The new proposal would disclose all complaints to 1999 for currently registered brokers or those whose registrations were terminated within the preceding two years. If approved by the SEC, BrokerCheck’s reporting of complaints would apply to brokers whose registrations were terminated within the preceding 10 years.

FINRA added that last year BrokerCheck made public information about final regulatory actions, including bars, suspensions and fines, against former brokers. The new proposal would make additional information – most notably court rulings – permanently available online.

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