Rogue brokers will find it harder to hide their disciplinary records if the Financial Industry Regulatory Authority Inc. has its way.
Last week, the brokerage industry's self-policing body proposed further expansion of broker information available through its free BrokerCheck service.
Under the proposal, the public would be able to access historic complaints lodged against brokers as far back as 1999. The expanded timeline would cover complaints about any registered broker or one whose registration had been terminated within the previous two years.
Currently only those brokers with three or more historic actions against them have those records on BrokerCheck.
The plan also calls for records of former brokers to remain public for 10 years — up from two years — once they are out of the industry. That proposal, Finra noted in a statement, would allow investors to “access information about individuals who may work in other sectors of the financial services industry or who have attained other positions of trust.”
Finally, the proposal would expand the information that the public could permanently access about a broker's records. Under Finra's scheme, such information would include criminal convictions or guilty pleas, as well as civil injunction, arbitration awards and civil judgments based on the former broker's involvement in a sales practice violation.
The new proposals come just a few months after the Securities and Exchange Commission approved a Finra proposal to make all former brokers' records permanently available through BrokerCheck.
Previously, a broker's records were no longer available two years after he or she left a securities firm.
“At the time of the expansion last year, the SEC suggested we look at further ways to expand the scope,” said Herb Perone, a spokesman for Finra.
All Finra proposals are subject to SEC approval.
E-mail Jessica Toonkel Marquez at [email protected].
