BrokerCheck Will Soon Be Linked to FINRA Member Firms’ Websites

Investors should use all available tools to research their financial advisor, such as the Financial Industry Regulatory Authority’s (“FINRA”) BrokerCheck website.  BrokerCheck provides publicly available information about brokerage firms and their registered representatives, such as disciplinary actions, licenses and employment history.

The Securities and Exchange Commission (“SEC”) approved a proposal to amend FINRA Rule 2210 in October 2015 that will require brokerage firms to include a “readily apparent reference and hyperlink to BrokerCheck” on the firms’ website.  Specifically, the “initial webpage that the member intends to be viewed by retail investors” as well as “any other webpage that includes a professional profile of one or more registered persons who conducts business with retail investors” beginning on June 6, 2016.  The SEC stated that the hyperlink requirement to BrokerCheck from FINRA member firms’ websites will create easy access to brokers by increasing investors’ “awareness and use”  of the tool.  The rule also will apply to websites moderated by financial advisors that are independent contractors.    

Certain potential requirements were excluded from the proposal, as they were viewed by FINRA as “overly burdensome” and would “require significant system and operational changes without commensurate benefits.”  One such exclusion was a requirement that FINRA member firms link to BrokerCheck on third-party websites, such as LinkedIn or Facebook, which are not controlled by FINRA member firms.  Additional information can be found here.  

About Faruqi & Faruqi, LLP

Faruqi & Faruqi focuses on complex civil litigation, including securities, antitrust, wage and hour, and consumer class actions as well as shareholder derivative and merger and transactional litigation.  The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania.

Since its founding in 1995, Faruqi & Faruqi has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees.

To schedule a free consultation with our attorneys and to learn more about your legal rights, call our offices today at (877) 247-4292.

About Christine Goodrich

Christine E. Goodrich is Senior Associate with Faruqi & Faruqi’s New York City office.  Ms. Goodrich’s practice is focused in securities arbitration, litigation and regulation.

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