Markey Urges FINRA to Continue Enforcement Actions, Improve Disclosures on Rogue Brokers

Contact: Giselle Barry (Markey) 2022242742

Agency responds to lawmaker concerns with commitment to focus on highrisk brokers


Washington (November 22, 2013) - In response to concerns expressed by Senator Edward J. Markey (DMass.), the Financial Industry Regulatory Authority (FINRA) has acknowledged major problems with its system that provides investors with information on brokers and brokerage firms who may have complaints filed against them and has committed to taking action to protect the investing public from "rogue brokers" who continue practicing even after numerous disciplinary disclosures. In its letter to Senator Markey, FINRA acknowledged the need to review its expungement process, and committed to looking for ways to better incentivize brokers to pay outstanding arbitration awards and settlements, improve the BrokerCheck system, and expand its High Risk Broker initiative. BrokerCheck is the FINRArun website that allows investors to easily access the background of any broker or brokerage firm registered with FINRA. FINRA also acknowledged that since February 2013 it has taken action against dozens of highrisk brokers through targeted, expedited investigations. 


"The fact that dozens of brokers have been designated highrisk and 16 brokers have been barred from the securities industry in mere months underscores the urgent need for FINRA and the SEC to engage in much more vigorous enforcement of rogue brokers," said Senator Markey. "FINRA's commitment to expand the High Risk Broker Initiative and establish a dedicated enforcement team are important initial steps. I commend FINRA for making BrokerCheck more userfriendly, but I remain concerned that the information BrokerCheck provides to investors is incomplete. I look forward to working with FINRA to ensure accountability as they implement these reforms, and I am eager to receive a response from the SEC on my inquiry."


The response from FINRA to Senator Markey can be found HERE . Senator Markey's October letter to FINRA can be found HERE. Senator Markey's October letter to the SEC can be found HERE


In 1990, thenRep. Markey coauthored the law that required the securities industry to create a hotline that investors could call to check a brokers' disciplinary history. Today, that hotline has become the webbased system known as BrokerCheck.  In 1993, as chair of the House Telecommunications and Finance Subcommittee, Senator Markey held hearings on "rogue" brokers and the need for better oversight by the SEC and industry selfregulatory organizations in order to better protect investors. As a result of the hearing and subsequent investigations, thenSEC Chairman Arthur Levitt decided to include arbitration awards and settlements in a broker's disciplinary history and to improved tracking and discipline of unscrupulous brokers.