FINRA Seeking Further Disclosure & Promotion of “BrokerCheck” Program

Recently, the Financial Industry Regulatory Authority (“FINRA”) has requested the Securities and Exchange Commission (“SEC”) to approve amendments to Rules 2267 and 8312, which would increase disclosure requirements and promotion of their BrokerCheck program.

In an attempt to facilitate and increase investor use of BrokerCheck information, Rule 2267 would be amended to require FINRA member firms to include a reference and link to BrokerCheck on their websites. In addition, member firms would be required to maintain the reference and link on related websites “maintained by, or on behalf of, any person associated with a member firm.”

Rule 8312 would be amended to make information regarding investment-related civil actions brought by state or foreign regulatory authorities against associated persons of a member firm permanently and publicly available in BrokerCheck, even if such actions have been dismissed as a result of a settlement agreement.

These requests come on the heels of changes FINRA made to BrokerCheck in May, and further magnifies registered complaints made towards brokers and investment advisers – whether those complaints are warranted or not.  For those firms who find their records spotted with unfair, inaccurate, or outdated customer complaints, FINRA Rule 2080 could provide relief for expungement in certain situations.  Furthermore, as discussed in a prior blog post (September 21, 2012), a California court of appeals recently found that even if a broker has not met the grounds set forth in FINRA Rule 2080 for granting expungements, expungement may be granted by the courts on purely equitable grounds.

For further information on this, or other related topics, please contact us at info@jackolg.com or (619)298-2880.

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