A recent analysis from the
Wall Street Journal has revealed alarming news about stockbrokers who fail to disclose discrepancies
about their financial and criminal history – there are a lot of
them. According to the
WSJ analysis, more than 1,600 stockbrokers were found to have histories involving bankruptcy
filings and criminal charges that were not disclosed to investors.
Failing to disclose pertinent information and red flags about a stockbroker's
financial and criminal background is a direct violation of regulations.
Because these pieces of information can indicate a great deal about a
stockbroker's character, professional abilities, and ethical conduct,
they are often considered "red flags." The same brokers found
to have had undisclosed bankruptcies or criminal charges on their record,
for example, were also found to have
accumulated more complaints from clients and more disciplinary actions than other brokers, according to the
WSJ analysis. One broker profiled in the
WSJ article – who had racked up a bankruptcy, tax lien, judgment for
unpaid debts, and a criminal conviction that were not disclosed to investors–
reportedly cost a 75-year-old client his life savings.
In a fair and ethical marketplace, investors have the right to know about
the character of the brokers with whom they work and to whom they entrust
with their money. The Financial Industry Regulatory Authority (FINRA)
requires brokers and brokerage firms to report a number of issues, including
any bankruptcies and certain criminal charges. These typically include
felony charges, finance-related allegations, and certain misdemeanor charges.
Investors are able to view such information on FINRA's BrokerCheck®.
The fact that many brokers' records seeped through the cracks indicates
a serious failure by firms and authorities who regulate the brokerage
business. Regulators have commented that failures to report are unacceptable,
and that efforts will be made to bring disciplinary actions where appropriate.
At Meyer Wilson, our team of investment fraud lawyers is committed to helping
investors who have suffered financial harm at the hands of stockbrokers
and brokerage firms recover their losses. If you believe you have a case
involving investment misconduct – including losses committed by
brokers who did not properly disclose their financial or criminal backgrounds
– our firm can help. Meyer Wilson represents clients nationwide
from offices in Ohio and California.
To learn more about your case and rights, call 888-390-6491.