Investors Scrutinizing the Regulators

Home Page

InvestorVoice.CA


Securities Regulation In CanadA


Fox Guarding the Hen House

   

New, improved NASD BrokerCheck goes live online
Redesigned service to provide more information for investors

Tuesday, March 20, 2007

By James Langton

The National Association of Securities Dealers has launched an updated, redesigned version of its online service NASD BrokerCheck that not only expands the amount of information about individual brokers and securities firms available to the public, but promises a more user-friendly experience as well.

The regulator says that vastly improved search options make finding an individual broker or firm faster and easier. When they find that a broker or firm has “disclosure events” such as criminal actions, customer complaints and disciplinary actions by regulators, investors no longer have to make a separate request for a disclosure report to be sent via email at a later time. Instead, the disclosure report is available online within seconds. Finally, an educational component has been added to the service, to help investors view any disclosure events in the appropriate context when evaluating a particular firm or broker.

Information that NASD BrokerCheck will now provide on individual brokers includes: current employers; a 10-year employment history; other businesses the individual engages in; all approved licenses and registrations; qualification exams passed; criminal felony charges and convictions; investment-related misdemeanor charges and convictions; disciplinary actions and investigations by regulators; investment-related civil judicial actions and proceedings; most consumer-initiated complaints, arbitration proceedings and civil litigations; unsatisfied judgments and liens, bankruptcy proceedings; and, employment terminations that follow allegations of misconduct or failure to supervise. Former brokers may now submit comments within two years of leaving the securities industry that will be included in a disclosure report.

NASD BrokerCheck reports on firms will include: administrative information including address, legal status, types of business engaged in and direct and indirect owner/officer information; a 10-year history of all felony charges and convictions, as well as investment-related misdemeanor charges and convictions; disciplinary actions and proceedings initiated by regulators; a 10-year history of investment-related civil judicial actions and proceedings; bankruptcy proceedings; unsatisfied judgments or liens; summary information on arbitration awards; and, for former NASD firms-registered firms, the date that the firm ceased doing business and, when appropriate, details regarding funds owed customers or other firms.

Canadian investors don’t have nearly as much information available to them through their regulators.

The NASD encourages investors to use this free public disclosure service to learn about the professional background and conduct of the securities firms and brokers with whom they plan to do business, or are already doing business. Last year, more than 4.7 million searches on brokers or firms were conducted on NASD BrokerCheck. Information is available on the nearly 5,100 currently active securities firms and approximately 660,000 currently registered brokers. Information is also available on thousands of inactive firms and formerly registered brokers.

“NASD is dedicated to investor protection, and information helps investors make better choices in today's complex investment landscape,” said NASD chairman and CEO Mary Schapiro. “NASD BrokerCheck should be investors' first stop in choosing a firm or broker. It provides convenient access to far more information than is publicly available about virtually any other professional they deal with.”

This represents the first major modernization of NASD BrokerCheck since the service was first introduced online in 1998.