HRO Securities Defense Blog

FINRA Proposes Permanent Disclosure of Disciplinary Proceedings Against Former Brokers

            For many years, FINRA’s Central Registration Depository (“CRD”), which also is known as “broker check,” has been a valuable source of information for investors wishing to learn about the background of their brokers, including whether they have a disciplinary history.   However, CRD data currently is unavailable for brokers whose FINRA registration expired more than two years ago.  This is a problem because brokers who are barred or fired, or who resign their positions, often take jobs in the insurance, real estate or financial planning industries.   The disciplinary history of these former brokers may be relevant to potential customers’ evaluation of their qualifications.

Effective Responses to Findings of Deficiency

             Despite the best efforts of broker-dealers and investment advisers to fully comply with all relevant rules, there are times when NASD or SEC examiners find deficiencies during an examination.  This is not surprising, given the increasing complexity of securities regulation and current harsh political climate.  The manner in which a firm responds to a notice of deficiencies is critical.  This article describes the regulatory decisionmaking process and effective responses to such a notice.