All brokers must be licensed and registered with the Financial Industry Regulatory Authority (“FINRA”). FINRA BrokerCheck is a free tool that allows investors to research relevant information about registered representatives’ disciplinary and employment history. Investors may find information about brokers and brokerage firms, as well as investment adviser firms and advisers.
The information available on FINRA BrokerCheck Report is obtained from FINRA’s Central Registration Depository (CRD) database. The database holds registration records of broker-dealer firms, branch offices, and associated individuals. The database includes employment, qualification, and disclosure information. Brokers complete these records as part of their securities industry registration and licensing process.
Investors can use the FINRA BrokerCheck tool by typing in the search box either the name or CRD number of their broker or the name or CRD number of their brokerage firm. The search query will return records matching the search term. Brokers and brokerage firms with common names will likely yield multiple results. Accordingly, investors should be careful to ensure that they are looking at the appropriate record listing the correct broker or firm.Breaking Down the Information Included in the Brokercheck Report
Once the investor finds their broker’s name, they can access a summary page of information found in the financial advisor’s BrokerCheck Report. This page summarizes the information into four areas: registration history, disclosures, qualifications, and employment.
The top of the page will show whether the broker is registered, the firm where the broker is registered, the number of disclosures, years of experience in the securities industry, number of firms that the broker has been registered with, the number of exams passed, and state licenses they hold.
When reviewing their broker’s CRD information, investors should consider whether the broker’s record shows customer complaints, whether the broker has been suspended or disciplined in the past, and whether the broker has been registered with a brokerage firm that has been sanctioned or barred from the securities industry.Registration History
The registration section includes the broker’s registration status, current firm, and a list of registered securities firms where the broker has been registered.
Investors should consider whether the broker has been employed by a firm that has been sanctioned or barred from the securities industry. A “caution’ icon will appear next to the name of firms that have been expelled from FINRA registration. Currently, the icon is a solid red triangle with a white explanation point in its center.Disclosures
The disclosure section contains information related to customer disputes, criminal felonies, investment-related crimes, industry disciplinary actions or investigations, investment-related civil actions, bankruptcy proceedings, judgments and liens, and terminations.
A customer dispute is when an investor, who is a customer of the financial advisor, files a complaint against a financial advisor or brokerage firm. These disputes often arise out of disputes over whether investment recommendations were in the customer’s best interest or whether the advisor mispresented or omitted any material facts.Broker Qualifications
The qualifications section will include the examinations and dates in which the broker passed their qualification exams to be registered in the securities industry.Employment History
The employment history section will show the broker’s full and part-time work, self-employment, military service, unemployment, and full-time education. It will include the broker’s employment information in and outside the securities industry for the last ten years, as reported by the broker on their last Form U4. Securities firms use the Form U4 to register brokers with self-regulatory organizations (SROs) such as FINRA and states.
Investors may also download a detailed report of the broker’s CRD, which will provide an in-depth look at the broker’s record. Simply put, investors should know who they are dealing with and should do their best to verify that they are dealing with a reputable broker or financial advisor.
Investors who believe that they may be dealing with a disreputable broker-dealer or financial advisor or that their broker has engaged in wrongdoing, should contact the experienced securities arbitration lawyers at Iorio Altamirano LLP for a free and confidential evaluation of their situation. Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.