by Brian Mahany
We are firm believers in full and complete disclosure. Americans are smart enough to understand that not every complaint against a stockbroker is legitimate. Many complaints are unfounded or frivolous. But as customers and clients, we should have the right to know if other complaints are pending against a broker. Under a new policy proposed by the Financial Industry Regulatory Authority, that may soon be possible.
Complaints against stockbrokers are not always disclosed until they are final. FINRA’s Broker Check system is a great tool to see if a stockbroker has a history of complaints, lawsuits or regulatory misconduct. The tool is free and in just a few seconds, you can know everything about your broker or the firm he or she works for.
FINRA’s disciplinary online reporting system system doesn’t include pending complaints. That means can be a year or two lag in the information on the system. If a broker is having substance abuse problems, marital strife or serious money problems, it is very possible the number of complaints will spike. Unfortunately, without real time data, consumers won’t know until its too late. The BrokerCheck system is great but only provides part of the story.
Although an isolated complaint shouldn’t keep a customer from doing business with a stockbroker, multiple complaints in a short period of time are a red flag worthy of further investigation. Currently, the SEC discloses information about the targets of its investigation. FINRA hopes to soon do the same.
Most stockbrokers are good, honest people. The industry does attract its share of bucket shops and “pump and dump”operators. We would think that honest brokers would want the bad actors to be exposed. Apparently not all do.
According to an article in InvestmentNews, one Los Angeles attorney working for a law firm that defends broker dealers said, “It’s another example of disclosing a broad amount of negative information against a broker.” We disagree and believe the public should decide.
If you have lost money to a stockbroker who recommended unsuitable investments, churned you account or failed to perform due diligence on the investments he or she recommended, you may have a claim. Stockbroker fraud cases and claims against investment advisers are primarily handled through arbitration. Most cases can be handled on a contingent fee basis meaning no legal fees unless we win.
If you have lost $100,000 or more because of a stockbroker, investment adviser or other financial professional, give us a call. The stockbroker fraud lawyers at Mahany & Ertl have helped many victims of get back their hard earned money. We also take cases involving other frauds including legal and accounting malpractice and Ponzi schemes.
For more information, contact attorney Brian Mahany. Brian can be reached at or by telephone at (414) 704-6731 (direct). All calls are protected by the attorney – client privilege.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. Fraud recovery available in many jurisdictions.
Need more information? Our Due Diligence blog has a search engine located in the upper right hand corner. For more information on specific fraud topics, just use the fraud tab or type in key words such as “stockbroker” in the search bar. We have many informative articles on our site.