As reported in the Wall Street Journal and elsewhere, on Friday the SEC approved FINRA’s proposed changes to Rule 8313 regarding the release of disciplinary complaints, decisions and other information. Under the amended rule, FINRA will be permitted to publish more full, unredacted complaints against brokers and firms in an online database (separate from BrokerCheck), that will be accessible by the public.
Previously, only terse, abbreviated summaries of FINRA enforcement complaints appeared on BrokerCheck, with only some complaints (alleging certain rule violations) available in full in a separate database of disciplinary actions. Investor advocates claim that the amended rule will, among other things, help the public make more informed decisions about who they are dealing with. On the other hand, industry groups and representatives contend that airing the full text of enforcement complaints (which effectively are one-sided, unproven allegations) unfairly will tarnish advisors’ reputations.
For its part, FINRA has noted that how an enforcement case ultimately is resolved also is made publicly available, and is attached to the charges. The SEC has stated, in approving the rule change, that the new rule promotes transparency.
The foregoing information is provided by Amato Law Firm, LLC and Chicago securities lawyer Ronald M. Amato. Mr. Amato is an experienced securities lawyer with substantial experience representing financial advisors, broker-dealers and investors in securities arbitration, employment transitions, and securities-related employment and regulatory matters. He can be reached at 312.466.5521 or through the firm’s website at www.ramatolaw.com.