The Financial Industry Regulatory Authority (FINRA) released a news story titled “FINRA Wins Okay for Major Expansion of BrokerCheck, Will Permanently Disclose Disciplinary Actions Against Former Brokers.” The SEC approval of FINRA having a permanent record of any broker misdeeds really helps investors get the best protection. The previous system absolved a broker’s record two years after they left the securities industry, making it no longer available to the public or under FINRA’s jurisdiction. But as of the 30th of November, former brokers records are available on BrokerCheck, FINRA’s free online system that allows investors to research the employment history, qualifications, and past disciplinary action of brokers.
While you may think that if a broker is no longer in the securities industry, investors would have no need to see their previous disciplinary history, that is not the case. Brokers that FINRA has barred in the past have been found committing fraud in other sectors of the financial industry, costing millions of dollars to investors. Investors looking to compare annuities and other investment products want a reputable broker. By using FINRA’s BrokerCheck system, investors are much more protected against the small percentage of fraudulent brokers out there. Last year alone there were over 11.6 million broker reviews done through the system. Not only can BrokerCheck disclose negative hits on a broker, it also helps investors find brokers with high qualifications and certifications. The system is meant solely for investor protection.
