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FINRA’s BrokerCheck Now Designates Restricted Firms

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Financial Industry Regulatory Authority introduces restricted designation for firms with significant disciplinary histories.


FINRA’s BrokerCheck Now Designates Restricted Firms The Financial Industry Regulatory Authority (FINRA) has approved an amendment to FINRA Rule 8312 (“FINRA BrokerCheck Disclosure”) to allow the disclosure of BrokerCheck’s designation of firms with significant disciplinary histories as “restricted” in its BrokerCheck database. The Securities and Exchange Commission (SEC) approved the proposal which will increase transparency for investors.

BrokerCheck is a free online tool provided by the Financial Industry Regulatory Authority (FINRA). investors can use it to research and verify the professional backgrounds of current and former brokers and brokerage firms. By entering a broker’s name or a firm’s name, users can view information about their professional and disciplinary history.

The broker check tool was created several years ago with the intention of educating the public on their financial advisors’ past misconduct and to provide investors with more information about the brokers and firms they are considering investing with. BrokerCheck discloses two types of information: (1) professional history (such as registration, employment, and education information); and (2) disciplinary history (such as customer complaints and FINRA or SEC disciplinary actions).

The addition of the restricted designation is intended to provide investors with more complete information about firms and brokers before investing. The designation will be applied to firms that have a significant disciplinary history, as defined by FINRA Rule 8312. A firm may be designated as restricted for a number of reasons, including, but not limited to, a history of customer complaints or FINRA or SEC enforcement actions.

FINRA will review the disciplinary histories of firms and brokers on an ongoing basis and may add the restricted designation to BrokerCheck for firms with a significant disciplinary history. The restricted designation will be displayed prominently in BrokerCheck and will be linked to a page providing additional information about the designation.

The restricted designation will appear in the professional history section of a firm or broker’s BrokerCheck report and may include information regarding the firm or broker’s disciplinary history, such as customer complaints or FINRA or SEC enforcement actions.

Noel, who started his career as a broker at Pruco Securities in 2008, according to BrokerCheck, replaces Frank Castellanos who moved in a similar role at Raymond James. Sugarman is not currently registered as a broker or financial advisor, according to BrokerCheck, but in the past was a director and an adviser at Morgan Stanley and UBS Financial Services.

Locala founded Oakwood Financial Group, a predecessor to Momentum Wealth Partners, in 1988. According to her BrokerCheck report, she'd been in the securities industry since 1997. Edward Scott Short has been in the industry since 1994 and with Laidlaw since 2004, according to his BrokerCheck profile.

The SEC’s approval of the amendment to FINRA Rule 8312 is intended to provide investors with more information about the professional and disciplinary histories of their brokers and firms. Although highlighting the restricted firm designation on BrokerCheck increases transparency for investors, it won’t give them a firm’s entire history, but it will provide investors with better access to disciplinary information.

Extracted Keywords: Financial Industry Regulatory Authority, BrokerCheck, restricted designation, significant disciplinary history, professional history, disciplinary history, customer complaints, SEC enforcement actions

Extracted Tickers: FINRA Extracted Image Description: Image of Financial Industry Regulatory Authority logo


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