After recent reports claimed that the Financial Industry Regulatory Authority’s BrokerCheck is full of holes and deletes crucial information about brokers’ backgrounds, FINRA’s board plans to consider on April 24 an amendment to its supervision rule, including background investigations of new brokers as well as requiring firms to beef up their verification of reps’ U4s.

FINRA announced Wednesday its rulemaking items for discussion at the April 24 board meeting, which includes a proposed amendment to FINRA Rule 3110, the supervision rule, regarding background investigations of applicants for registration, including requiring firms to adopt written procedures to verify Form U4.

Brokers use Form U4 to begin and end their registered relationship with FINRA; it asks questions about employment and criminal history. The self-regulator says that the forms are essential to its ability to perform its regulatory oversight responsibilities.

In March, The Wall Street Journal wrote that its own survey had revealed that more than 1,600 brokers had bankruptcy filings or criminal charges that weren’t publicly reported, which violated FINRA regulations.

The Journal says that it uncovered the reporting failures by comparing the records of more than 500,000 stockbrokers, obtained from states, with criminal and bankruptcy-court filings.

The Journal reported Tuesday that FINRA also intends “to vet the information publicly reported for each of the approximately 630,000 stockbrokers it oversees against public court records.”

The Public Investors Arbitration Bar Association (PIABA) released its own report in early March stating that BrokerCheck deletes crucial information about brokers’ backgrounds — including criminal records — despite the fact that such information is available from many state securities agencies operating under robust public records laws.

PIABA, a group of attorneys who represent investors in claims against brokers, stated in its report that the extent of omitted “red flag” background information in BrokerCheck is “so serious that unwitting investors relying on the online database may very well select brokers with whom they would not do business if they had access to the more complete picture available to FINRA but now being hidden.”

FINRA responded to the PIABA study by saying in a statement, “While the [BrokerCheck] system may not be perfect, we do have to make determinations on what information about registered representatives is appropriate to release, while at the same time balancing fairness rather than ignoring it.”

Check out FINRA’s BrokerCheck ‘Hides’ Criminal Records on ThinkAdvisor.