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Regulation and Compliance > Federal Regulation > FINRA

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FINRA wants to make its disciplinary actions permanently available to the public even if an offending advisor leaves the business. Under current rules, an advisor’s record generally becomes unavailable to the public two years after he or she leaves the securities industry and is therefore no longer under FINRA’s jurisdiction. This move gives advisors all the more reason to stay 100 percent in compliance with FINRA regulations.

The background check
“It has never been more critical for investors to research the backgrounds of the people who approach them with investment proposals,” said Richard Ketchum, FINRA chairman and CEO. “Individuals previously barred by FINRA and other securities regulators have surfaced in a number of recent frauds responsible for millions lost by unsuspecting investors. Investors should be able to check if the financial professional they’re dealing with has been the subject of a disciplinary action by regulators.”

FINRA’s BrokerCheck service lets investors instantly see the employment, qualifications and disciplinary history of more than 650,000 brokers under FINRA’s jurisdiction. FINRA estimates there are more than 15,000 individuals who have left the securities industry after being the subject of a final regulatory action and whose disciplinary history is not currently available on BrokerCheck.

The Internet detective

In many cases, final regulatory actions–such as bars, suspensions and fines–against a particular individual can be found in various places on the Internet, including on FINRA’s own Web site, by searching individual monthly disciplinary reports. FINRA’s proposal would make that information easily and centrally accessible through BrokerCheck.

FINRA filed its ruler proposal to expand BrokerCheck with the Securities and Exchange Commission. The SEC will publish the proposal in the Federal Register and solicit public comments in the near future.


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