According to an email sent by FINRA's Chairman and CEO to the execuive representative's of broker-dealer's on September 14th, it look as if FINRA's Board of Governors is seeking to increase and expand the use of the BrokerCheck system. BrokerCheck provides information to investors and other folks about a registered representative's background, including disciplinary history, complaints, arbitrations, lawsuits, and other things. Ketchum reported that the Board of Governors authorized staff to file proposed amendments to FINRA Rule 2267 that would require firms to include a reference to BrokerCheck on their websites, as well as on "certain websites maintained by, or on behalf of, any person associated with a member firm." Another proposal for a rule amendment would also make permanently disclosable certain actions brought by other regulatory agencies that were dismissed pursuant to a settlement agreement.
It does not appear that the rule filing has yet been made and it is not on the regulator's website. When it is, we will be able to read the proposed amendment and the rationale for making the changes. Certainly this change, if adopted, would impact many registered reps. who maintain their own websites (generally those who work for an independent-model firm), and it would certainly impact those brokers with disciplinary and other disclosures that they'd prefer not be more widely distributed.
With an ever-increasing mindset of disclosure, disclosure, disclosure by the regulators, brokers must be aware of the potential consequences of disclosure-related issues when dealing with regulatory investigations, customer complaints, arbitration claims and lawsuits etc., and should seek the advice of competent counsel to help them with these issues while considering the potential impact of future disclosure.
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