Is Your Broker a Crook? Check Their Background!

While most small investors are better served by using a discount broker, there are times you may want to invest with a real human being. If you’re that kind of highfalutin investor, you can now see if a broker has a “record.”

The National Association of Securities Dealers “BrokerCheck” is new-and-improved, letting you pull up the record of complaints and investigations against the broker.

See if there are any events listed under Disclosure of Customer Disputes, Disciplinary, and Regulatory Events.

“If there is a proliferation of consumer complaints against a broker, that would certainly be a red flag,” Davidoff says.

David Bayless, a former SEC attorney now with Covington & Burling, says he would be especially concerned if the broker had state or federal disciplinary actions.

Be sure to click “View Full PDF Report” if you want the lowdown. Otherwise, it’s just summary info that doesn’t help you much. MARK ASHLEY

Brokers revealed online [SF Chronicle]
(Photo: patapat)

Comments

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  1. mikesfree says:

    Yeah, look for other information too. I had an agent trying to sell me insurance and investments. I looked up information on him found he had his house foreclosed on and had declared bankrupcy too. There may have been some unforunate incident that caused it, but its hard to trust advice from someone who has had that kind of finacial trouble.

  2. FreakyStyley says:

    I pulled myself up on there, and they’re missing an exam I passed as well as having my education wrong.

  3. Dustbunny says:

    Interesting — my former broker, who lost a lot of my money shows up on the list with 2 pending customer complaints. I didn’t think I could file a complaint since I signed a disclosure statement when I signed with him, stating that I understood the risks of investing, but I think I’ll pursue it anyway. At least it might warn anybody else thinking of doing business with him.

  4. comedian says:

    Thanks for the link to this great resource.

    I looked my broker up and he has one complaint from back in ’04.

    The complaint is that he caused someone a loss of $1,500,000 for

    CLIENT ALLEGED SEVERAL SALES PRACTICE VIOLATIONS, INCLUDING SUITABILITY, CHURNING AND UNAUTHORIZED TRADING, WHICH RESULTED IN SUBSTANTIAL LOSSES.

    which was settled outside of arbitration for $425,000.

    Not exactly confidence inspiring. He’s never pushed any trading whatsoever on me, but he’s not very responsive either.

    Maybe I should go broker shopping next week.

  5. ibelli says:

    How did that guy get in there?