Marketwatch article by Suzanne Barlyn describes use of BrokerCheck system

Posted by on Mar 14, 2011 in FINRA, securities, Stockbroker issues | Comments(0)

The FINRA BrokerCheck system has been around for years. “In the old days” it was a manual system. A customer called a toll-free number and asked for the broker’s information. The information was mailed to the customer and a copy was sent tot he brokerage firm. This was good for the customer (kind of) and a nightmare for the brokerage firm since they were receiving many copies of requests for which they had no use.

Then came the internet. Clients were able to request information over the internet, without human intervention. At the same time, it meant that a competitor could steer a client to BrokerCheck to look at the report of another broker the client was considering. This still happens today. BrokerCheck reports were, and still are, limited in scope. But changes have been made.

As Suzanne Barlyn reports here, the BrokerCheck system has changed again. There is more depth to what is reported and former brokers with certain “marks” on their record will remain on the system even after the passage of two years’ time (the old cutoff). This will allow the investing public to check out the unregistered investment counselor’s background and the reason why he/she is not with a brokerage firm.

Overall, disclosure is good. My position on U-5 filings is stated in the article – specifics are generally much better than generalities, provided they are true.

That’s the view of one lawyer from Jupiter, Palm Beach County, Florida.

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