The Financial Industry Regulatory Authority Inc. (FINRA) has released a statement saying that it has ranked all 634,403 registered representatives it regulates in an effort to regulate stockbroker misconduct.
Rankings to Help Regulators Focus on Misconduct
FINRA’s Executive Vice President for Regulatory Operations, Susan Alexrod, stated the rankings are based on factors such as prior regulatory disclosures, disciplinary actions, and employment history. The rankings are an effort to target brokers FINRA believes pose the largest threat to investors and in effect remove them from the system.
Earlier this year FINRA established an exam unit for high-risk brokers that. The unit is another way that FIRNA is focusing resources on broker misconduct.
While FINRA has stated that its “. . . goal is to make sure investors are protected every day” and that FINRA “. . . need[s] to focus [its] exam work and [its] surveillance work on individuals that pose the greatest risk to customers,” FINRA does not plan to make its list of high-risk brokers available to the public.
FINRA’s actions are inconsistent with its words. One would think that if FINRA truly were concerned with protecting customers from bad brokers, then it would make its “high-risk” broker list available to the public. That would allow the public to make informed decisions and steer clear of these questionable brokers. Until and unless FINRA takes its investor-protection obligations seriously, investors will continue to prey upon by bad brokers.
Inquiries by FINRA focus on the products that the brokers sell, to whom they are selling those products, and whether the brokers are violating securities laws or FINRA rules.
This year, the FINRA board moved forward with approvals for a rulemaking process that would allow FINRA to put more pressure on firms that hire brokers with a history of misconduct.
Did You Lose Money as a Result of Stockbroker Misconduct?
If you believe you have been the victim of stockbroker misconduct, you may have certain legal rights that require your immediate attention.
Call an Investment Fraud Attorney Today
If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions.