DEFENDING YOUR PROFESSIONAL INTEGRITY
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Three weeks ago, CNBC aired a commercial prior to an episode of the popular television series American Greed. The one-minute, twenty-two second commercial was portrayed as a public service announcement aimed at the investing public. Vice President of Enforcement for FINRA, Brad Bennett, speaks to the public about how each investor should vet a broker.
“The first step,” as professed by Bennett, is to go to BrokerCheck. He proclaims that “the key components of [sic] what you need to know about the broker” are:
The “second step,” in Bennett’s opinion, is for investors to interrogate brokers about those items above which may be found on a BrokerCheck profile.
Bennett appeals to the investors’ desire to be heard when they are upset about a broker or an investment which did not perform as hoped. He tells of FINRA’s willingness and desire to take “tips” from investors that “might have seen something suspicious.” His invitation is intentionally ambiguous to the degree that it invites “tips” lacking any merit whatsoever. In addition, the clever placement of this commercial, immediately prior to an episode of American Greed, speaks loudly of the emotional appeal by FINRA to increase the importance of their beloved BrokerCheck and draw attention (warranted or otherwise) to the disclosures thereon.
These efforts by FINRA to inflate the value and meaning of BrokerCheck generate a great deal of business and revenue for FINRA. Revenues are received by the regulator from investigations and inquiries stemming from the “tips” received (and ultimately resulting in fines, penalties, and sanctions). Then U4’s are updated (more revenue). And in turn, all of it leads to an increased amount of disclosures being granted expungement awards after an arbitration panel finds no merit to the customers’ disputes (yet again, even more revenue to FINRA).
AdvisorLaw has a dedicated team of attorneys and staff whom specialize in representing brokers marred by disclosures viable for expungement from the CRD system. Contact us today if you or a colleague has disclosures on BrokerCheck where:
See our recent commentary in InvestmentNews here.
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This blog is my ongoing effort to inform and educate FINRA licensed professionals about the evolving regulatory ecosystem in which we operate.