January 6, 2009
When sending said notice, without inclusion of the following additional disclosure, public customers will be misled into believing that their broker or other financial professional has not been involved in previous customer complaints, usually because of dismissals and expungement actions issued by arbitrators. Accordingly, the wording should be changed or amended to read as follows.
"The FINRA web site, broker check, may not accurately reflect a broker's previous customer complaints. Due to dismissals and expungement, it is possible that a broker may have had any number of prior customer complaints which simply do not show up on the FINRA broker check web site".
To not include this disclosure would be the moral equivalent to intentionally disseminating misleading information to the public. For example, we have named many brokers in arbitration actions at FINRA, which upon settlement or award, then had their CRD records expunged. Some brokers we have named on multiple occasions but their CRD at broker check is clear. So too has virtually every attorney active in the business of representing public customers against securities firms at FINRA arbitration.
Perhaps a better approach would also include a statement such as " In order to accurately ascertain if your broker has been involved in previous customer complaints which may not show up on the FINRA web site broker check because of dismissal or expungement, is to obtain a statement from the firm attesting to whether not your broker has been the subject of other customer complaints".
This would certainly help improve the public's understanding and knowledge of the person they are doing business with, which we assume is the point behind this whole exercise, as well as add important credibility to broker check which unfortunately is currently lacking.
Investors Recovery Service
Novato, Ca. 94949