Finra moves to keep broker misdeeds on permanent record
The Financial Industry Regulatory Authority Inc. has announced that it is proposing to expand its BrokerCheck service to include disciplinary records of brokers permanently even if they are no longer employed in the industry.
The Financial Industry Regulatory Authority Inc. has announced that it is proposing to expand its BrokerCheck service to include disciplinary records of brokers permanently even if they are no longer employed in the industry.
The New York- and Washington-based regulatory organization filed its rule proposal with the Securities and Exchange Commission last week, according to a statement.
Currently, a broker’s record becomes unavailable to the public two years after he or she leaves the industry, the agency said in the statement.
The records of more than 15,000 people who have left the industry after being subject to a regulatory action are not currently available on BrokerCheck, which is the agency’s free online research service.
“It has never been more critical for investors to research the backgrounds of the people who approach them with investment proposals,” Richard Ketchum, Finra’s chairman and chief executive, said in the statement.
“Individuals previously barred by Finra and other securities regulators have surfaced in a number of recent frauds responsible for millions lost by unsuspecting investors.”
While many of the regulatory actions can be found on Finra’s main website, the proposal to include these records on BrokerCheck would consolidate the information in one place, said Finra spokeswoman Nancy Condon.
The rule needs SEC approval. Once the SEC publishes the proposal, it will also open up a comment period, she added.
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