The Financial Industry Regulatory Authority (FINRA) has won approval from the Securities and Exchange Commission (SEC) to expand its BrokerCheck Service and make the disciplinary records of brokers permanently available online to the public.
Previously, a broker’s record generally became unavailable two years after he or she left the securities industry. FINRA estimates there are more than 15,000 individuals who have exited the securities industry after being the subject of a final regulatory action and whose disciplinary history is not currently available via BrokerCheck.
Disclosure records for former brokers will be available on BrokerCheck beginning Nov. 30.
“This is an important step for investors and for investor protection,” said FINRA Chairman and CEO Richard Ketchum. “Individuals previously barred by FINRA and other regulators have surfaced in a number of recent frauds in other parts of the financial industry that cost unsuspecting investors millions of dollars. It has never been more critical for investors to research the backgrounds of the financial professionals they deal with than it is today.”
In approving the BrokerCheck expansion, the SEC said “it is possible that a (former broker) could become a financial planner or work in another related field where his securities record would help members of the public decide if they should accept his financial advice or rely on his advice or expertise.”
In 2008, individuals used BrokerCheck to conduct 11.6 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck.