Investors will soon be able to see more customer complaints, criminal convictions and rulings against brokers when they check out their broker on the Financial Industry Regulatory Authority’s (FINRA’s) web site through its free online BrokerCheck service, according to a July 14th article in InvestmentNews. While the absence of complaints does not guarantee that brokers will always adhere to “high standards of commercial honor and just and equitable principles of trade,” as FINRA purports to demand, investors should always avail themselves of this opportunity, preferably before doing business with a broker.
FINRA’s broker profile (also known as a “CRD”) will now contain reported complaints and disciplinary actions going back to 1999 for current and former brokers. The change will also extend the public disclosure period for a broker who leaves the industry to 10 years from two, according to the article. Information like criminal convictions, civil injunctive actions and arbitration awards against former brokers will be posted permanently.
“This additional information will benefit investors who are considering whether to conduct, or continue to conduct, business with a particular securities firm or broker,” FINRA Chairman and CEO Rick Ketchum was quoted as saying. “Just as important, it will provide valuable information about persons who have left the securities industry, often not of their own accord, who have established themselves in other segments of the financial services industry and can still cause great harm to the investing public.”
The changes will begin in late August, at which time historic complaints going back to 1999 will be added to the public records of all current and former brokers. By the end of the year, the information, including criminal and civil actions if applicable, will be available on all brokers whose registrations were terminated within the last 10 years.