May 12, 2010
Thank you for allowing me the opportunity to comment on the proposed amendments to FINRA's Rule 8312 (FINRA BrokerCheck Disclosure).
Although I generally support the proposed expansion of BrokerCheck, I am opposed to the proposal in its current form as it relates to the display of historic customer complaints.
Any client can accuse a representative of wrongdoing by a simple written letter. These allegations are just that, "allegations". Just like in our legal system where a person is considered innocent until proven guilty - these complaints are unproven charges or statements until fully vetted before an arbitration panel or court of law. I am diametrically opposed to a perpetual release of this information against a representative who may not even have had an opportunity to respond on behalf of his or her self. Often times these complaints are written as a way for a client to vent their frustration over a completely legitimate financial loss or some other aspect of their account that was not handled to their satisfaction. This doesn't automatically mean that the subject at issue was not, in fact, handled properly. Many complaints are filed and never followed up on by the client. Under the expansion proposal, these stale complaints that have never been fully adjudicated, will be listed on this regulatory disclosure vehicle unendingly. It is only human nature for any normal investor to automatically presume that the representative "must have done something wrong" - or why would this regulatory disclosure system display such information?. I do not believe that complaints should be displayed forever. However, if this aspect of the proposal will not be modified, I would request that, at a minimum, the area of the site that displays this information clearly indicates these items were based solely on information provided by the customer and have not been arbitrated, or determined by a court (or some other language that makes it clear these are unproven allegations).
I believe it is in the best interest of the public to have as many facts as they can about the representatives or advisors they work with - and frankly, would encourage the insurance divisions of the States to figure out how they, too, can add the information they maintain in their files on insurance producers that are also licensed as either registered representatives or investment advisors. This would provide investors with all of the available information on that individual within one resource. I do not believe, however, that it is in the best interest of the public to have access to unproven, one-sided allegations. Although I recognize there is a capability for comments to be posted as a means for representatives or advisors to respond to these complaints within the CRD system - my experience is that most of them are unaware of this facility and do not utilize it.
Thank you for taking my comments into consideration.
Sincerely,
Deborah Castiglioni
CEO, CCO
Cutter Company, Inc.