April 8, 2009
I do NOT support the reporting of allegations of sales practice violations against registered persons made in litigation or arbitration in which the registered person is not named as a party. I prefer a “bright line” reporting requirement, where it is clear from the pleadings that a particular registered person is being accused of wrongdoing. When a registered person is not named as a defendant or respondent, it will force Finra members to guess when an allegation has “crossed over” to being a reportable item. I find it disingenuous that plaintiffs or claimants would NOT name a registered person as a party, for whatever reasons, and then claim that it is in the public’s best interest that those same un-named persons should then be reported as if they had been named. It has been my experience that plaintiffs and claimants usually name as many defendants or respondents as possible, in order to have as many “pockets” as possible for monetary damages.
Because information filings on Form U-4 and Form U-5 are publicly accessible via BrokerSearch, we should err on the side of caution when reporting allegations of wrongdoing. In this industry, one’s reputation is vitally important and can also make the difference between having a job or not.
Thank you for the opportunity to comment.
Neal E. Nakagiri
President, CEO, CCO
NPB Financial Group, LLC
3500 W. Olive Avenue, Suite 300
Burbank, California 91505