Changes to Broker Check: Update Rep Complaint Filings!

If you've been reading your Notices (10-34 and Info Notice 8-3) you know that Broker Check will, as of August 23, display complaints that are older than 24 months and that haven’t been settled or adjudicated, or that settled for less than the prior, respective U4 disclosure threshold. There are other changes, too...here's a full summary of the changes, courtesy of FINRA:

The SEC approved amendments to FINRA Rule 8312, which governs the release of informtion through Broker Check. The amendments:

(1) make publicly available in Broker Check all historic customer complaints that became non-reportable after the implementation of Web CRD;
(2) permanently make publicly available in Broker Check information about former associated persons of a member firm, as reported to CRD on a uniform registration form if they were (a) convicted of or pled guilty or no contest to certain crimes; (b) subject to a civil injunction involving investment-related activity or found in a civil court to have been involved in a violation of investment-related statutes or regulations; or (c) named as a respondent or defendant in an arbitration or civil litigation in which they were alleged to have committed a sales practice violation, and which resulted in an award or civil judgment against them;
(3) expand the Broker Check disclosure period for former associated persons of a member firm to 10 years from two years; and
(4) codify FINRA’s current process for disputing the accuracy of (or updating) information disclosed through Broker Check.

For instance, if one of your Reps had a customer complaint that was reported on U4 3 years ago, but was never resolved—say it faded away, for instance, because you or the Rep never heard from the complainant again—that complaint currently does NOT show up on Broker-Check. As of August 23, it will show up. It’s status will show ‘pending’ if it remains pending.

It is in your Reps’ best interest to make sure their historic complaint disclosures are accurate. For instance, if a complaint was resolved but the CRD record was never updated to show that, then now is the time to do it.

FINRA is being helpful (and Allison in Disclosure was extremely helpful in explaining all this!) by looking at ALL historic complaint filings to determine which are ‘pending’ and may be subject to updating. For any such complaints identified as pending, they will issue either a disclosure letter for the individual Rep, or they will batch the occurrences in a new category of disclosures letters issued to the firm, itself.

Here’s what is important:  make sure you are set up to receive notifications of outstanding disclosure letters...that way, you and your Reps can address the status of prior DRP's in order to make changes, if necessary.  Also go into Organization in CRD Main and look for the new ‘disclosure letter’ category. Later this month check that link to see if FINRA has batched 'pending' complaints for your review. NOTE: for right now, they will not send you notification of batched disclosures letters--there's no mechanism for that presently.


Good luck.