April 7, 2009
I write to express my support for the portion of the proposed rule change which closes the loophole that broker dealers rely on as justification for not disclosing to the public sales practice and customer complaints on a registered representatives CRD. Under the current reporting structure, broker dealers argue that they are not required to report on a registered persons U4 allegations concerning sales practice violations made in an arbitration filing or lawsuit.
Wall Streets failure to adequately and timely report customer complaints and sales practice violations deprives the public of material information in making a decision about the hiring of a financial advisor. The proposed rule change reflects the reality that many investors and their attorneys do not regularly name brokers in customer arbitrations or lawsuits. This change is a step in the right direction and designed to require the documentation and reporting of customer complaints and sales practice violations of registered individuals even when they are not individually named as a party in customer arbitrations.
It is urgent that the Commission approve this portion of the rule on an accelerated basis to provide transparency to the investing public.