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Reuters Analyzes FINRA BrokerCheck Data to Compile List of High-risk Brokerage Firms After FINRA Fails to Disclose Said Information

Posted: June 16th, 2017

A Reuters investigation team ran a story on June 12, 2017 concerning high-risk brokers and brokerage firms and compiling a list of the firms with highest percentage of brokers with BrokerCheck disclosures.

The FINRA BrokerCheck tool allows users to search specific brokerage firms and brokers to see a variety of information such as location, ownership, outside business activities and, most importantly, FINRA disclosures.

There are a total of 23 types of incidents that might give investors concern, such as regulatory sanctions, lawsuit judgments and bankruptcies.  Unfortunately, the information, while very helpful, leaves out bulk information about which brokerage firms have a higher percentage of brokers reporting these incidents.

According to the Reuters story, the FINRA BrokerCheck tool, while very helpful, does not allow users to view the FINRA data in bulk form.  Bulk form data would allow for database analysis to find patterns at brokerage firms that might trouble investors.

A FINRA official, according to the Reuters story, said that FINRA identified 90 firms as posing the highest risk to investors and flagged them internally for higher scrutiny.  Additionally, FINRA also created a dedicated unit focuses on those high-risk firms – which FINRA announced in its 2017 Regulatory and Examination Priorities Letter. The problem is that these firms are not disclosed to the investing public.

The same day the Reuters story was published, though, FINRA CEO Robert W. Cook proposed flagging firms FINRA deems high-risk.

Reuters analyzed the data, though, and compiled a list of 48 brokerage firms with the highest percentage of reportable incidents that might cause investors the most concern.  While FINRA did not outright confirm or deny whether or not those firms are on its internal list of high-risk firms, executive vice president of regulatory operations, Susan F. Axelrod, said in regards to the 48-firm list: “Let’s just say those are not new names to us.”

Often times, these brokers with high reported incidents bounce around from small brokerage firm to small brokerage firm.  Take New York broker Richard J. Belz (CRD# 1140219) of R.F. Lafferty & Co., Inc. (CRD# 2498).

Belz has bounced around to 9 different firms in his career, including Westpark Capital, Inc. (CRD# 39914), a brokerage firm that made Reuter’s 48-firm list.  Belz joined the firm when Westpark Capital hired him from his previous firm, Newport Coast Securities, Inc. (CRD# 16944), after FINRA permanently barred Newport for excessive trading in client accounts.

Silver Law Group and its attorneys continue to combat broker and brokerage firm misconduct.  Our firm has handled hundreds of cases, recovering millions of dollars on behalf of aggrieved investors.  In fact, our attorneys have handled numerous cases against many of the brokerage firms on the Reuters 48-firm list.

Contact Our Firm if You’ve Lost Money

FINRA arbitration is a fast, efficient way to recover your lost investment funds.  We work on a contingency fee basis, meaning you pay us nothing unless we win and recover money for you.

If you have invested with any brokerage firm on this 48-firm list (hyperlink to list) and have lost money doing so, you may be able to recover some or all of your losses.  Our lawyers are experienced in recovering investor losses due to broker and brokerage firm misconduct through FINRA arbitration.

Silver Law Group represents the interests of investors who have been the victims of investment fraud.  If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.


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