FINRA recently announced that the SEC approved its proposal to expand the amount of information about brokers and former brokers available to the public through BrokerCheck on FINRA’s website.  In addition to expanding the types of information available, information regarding former brokers will be publicly available for a longer period of time under the proposal approved by the SEC. 

FINRA’s proposal will be implemented in two phases, which are scheduled to be completed by the end of this year.  BrokerCheck will be expanded as follows:

  • For currently registered brokers and those that have been terminated from employment with a broker-dealer within the preceding 10 years, BrokerCheck will disclose all customer complaints, arbitrations or litigations dating back to 1999 that have not been adjudicated in more than two years or that have been settled for amounts that were lower than the reporting threshold (currently $15,000). 
  • The full records for former brokers will be publicly available for ten years from the time they leave the securities industry, rather than the current two years.
  • Information regarding former brokers’ criminal convictions or pleas of guilty or nolo contendere; civil injunctions or findings of involvement in a violation of any investment-related statute or regulation; and arbitration awards or civil judgments involving alleged sales practice violations reported to FINRA since 1999 will be permanently available to the public.

FINRA will also formalize the process to dispute the accuracy of factual information disclosed through BrokerCheck.  FINRA will review all written submissions, along with available supporting documentation, disputing the accuracy of the factual information.

While the expansion of publicly available information regarding current and former brokers will undoubtedly benefit investors, it raises potential concerns for brokers.  Customer complaints, even ones lacking merit, and other matters that brokers thought were behind them, may now come back to haunt them.  It behooves brokers and former brokers to review the accuracy of the information disclosed through BrokerCheck once FINRA’s expansion is complete.  The information may be dated, inaccurate or incomplete.