The Financial Industry Regulatory Authority (FINRA) announced Monday it's proposing a major expansion of its BrokerCheck service to make records of final regulatory actions against brokers permanently available to the public, regardless of whether they continue to be employed in the securities industry.
The firm says final regulatory actions by the SEC, regulatory organizations and the States are to be included in permanent disclosure to the public.
Under current rules, a broker's record generally becomes unavailable to the public two years after he or she leaves the securities industry and is therefore no longer under FINRA's jurisdiction.
The firm filed its rule proposal to expand BrokerCheck with the Securities and Exchange Commission (SEC) late last week. The SEC will publish the proposal in the Federal Register and solicit public comment in the near future.
"It has never been more critical for investors to research the backgrounds of the people who approach them with investment proposals," said Richard Ketchum, FINRA chairman and CEO in a released statement. "Individuals previously barred by FINRA and other securities regulators have surfaced in a number of recent frauds responsible for millions lost by unsuspecting investors. Investors should be able to check if the financial professional they're dealing with has been the subject of a disciplinary action by regulators."
