Check out your Broker and his Firm: Use FINRA’s BrokerCheck before you write a check

• Posted by guestcontributor on March 23rd, 2008


• Filed in Guides, Tips and Practice Pointers, Uncategorized

by Bill Thomas, Guest Contributor

Does “free financial advice” sound like another oxymoron? Nothing is really free, right?

Well, read on, McDuff: You can do a history check on your broker and his company, and all it costs you is a few minutes. There is no charge, no fee, no costs, no registration, no follow-up spam.

The Financial Industry Regulatory Authority (FINRA) has an on-line tool that gives you some background information on brokers and their firms. BrokerCheck should be one of your first stops before choosing to do business. You will find them at

brokercheck.finra.org

FINRA was formed through the 2007 consolidation of the NYSE and NASD regulatory bodies. It’s a non-profit organization that licenses and regulates securities brokers and their firms. FINRA promulgates and enforces rules for its members. It is a Self-Regulatory Organization, or SRO.

The report is extremely easy to request. Just enter the first and last name of the person or the firm’s name, and click START SEARCH. If there is more than one person with that name, you’ll be able to use additional results data to help you decide which is the one you are looking for. And then just click on the name to view the report. You can either view online or download a more extensive report.

The report is a treasure trove. You’ll find out, among other things, in what states your broker is licensed to do business and if there have been any sanctions imposed by regulators. You might find regulatory actions, investment-related civil suits, customer disputes that contain allegations of sales practice violations against brokers, felony charges and convictions, misdemeanor charges and convictions relating to security violations, as well as financial events such as bankruptcies, compromises with creditors, judgments, and liens.

But suppose you don’t care to access the information through the web. You can telephone the BrokerCheck hotline at (800) 289-9999. Or fax them at (240) 386-4750. Finally, you can mail a request to

 

FINRA BrokerCheck
P.O. Box 9495
Gaithersburg, MD 20898-9495

And all it costs you is a few minutes of your time.

Bill Thomas consults and advises on securities, due diligence, Foreign Corrupt Practices Act (FCPA) and Anti-Money Laundering (AML). Mr. Thomas retired from the Securities and Exchange Commission, where he was Enforcement Branch Chief in the New York Office. He can be reached at BillThomasNYC@earthlink.net