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FINRA’s BrokerCheck

Recently, the Financial Industry Regulatory Authority (FINRA) launched an advertising campaign to increase awareness of its BrokerCheck program by the public. BrokerCheck is a free, online tool that allows investors (as well as other interested parties) to gain access to a wealth of information related to investment brokers and brokerage firms. While BrokerCheck has existed for several years, FINRA appears to be attempting to increase its relevancy and use.

What is BrokerCheck?

Intended primarily for investors to gain a clearer picture of the broker they are dealing with, BrokerCheck gives access to information related to the broker, including, but not limited to:

  1. Current employment information and employment history for the last ten years (including employment within and outside of the brokerage industry);
  2. Licenses held and where the broker is registered;
  3. Qualification examinations passed;
  4. Charged or convicted felonies; and
  5. Charged or convictions of investment-related misdemeanors.

Richard G. Ketchum, FINRA’s chairman and CEO, stated, “BrokerCheck is a key component to FINRA’s ongoing efforts to help investors make informed choices about brokers and brokerage firms.” Mr. Ketchum continued, “People immediately go online to check out a new restaurant where they might spend $25 for a meal, but don’t think to use BrokerCheck when they’re handing over $2,500 – or $25,000…to an investment professional to invest.”

The television advertisements began airing on June 1 st, with other advertising planned for print and social media. While BrokerCheck provides beneficial information to investors, it also has limitations. For example, it does not provide opinions or recommendations about brokers. Rather, the purpose of BrokerCheck is to simply provide unbiased, factual information to investors. As a result, the information provides no guarantees that the broker will perform well or is best suited for the investor and his or her particular financial circumstances.

Another limitation is that some information is removed after a certain amount of time has passed, like, for example, that a broker went through bankruptcy over ten years ago. Similarly, information may not be available in relation to a broker’s work in other parts of the financial industry, such as in insurance or banking. Finally, FINRA relies on brokers providing information to be included in BrokerCheck. While brokers are under an obligation to provide this information, sometimes they do not comply.

Protecting Investors

BrokerCheck is just one of the many tools available to investors. In addition to providing information to allow for safer and more informed investing, FINRA also provides a means for holding brokers who commit misconduct responsible through arbitration and mediation. Through these proceedings, FINRA provides a way to punish broker misconduct, as well as a way to help investors recover for losses resulting from that misconduct.

If you would like more information related to the investor protection that FINRA provides, speak with an experienced securities law attorney today. At the Silver Law Group, we represent investors harmed by stockbroker misconduct in proceedings before FINRA. Our attorneys can help you recover for losses due to investment and securities fraud.

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