Securities Arbitration Lawyers BlogReuters Releases List of Top 48 Brokerage Firms with Highest Percentage of Brokers with Most Serious FINRA Disclosures
A Reuters investigation team published a story earlier this year documenting high-risk brokers and brokerage firms using bulk data it compiled. Silver Law Group continues to investigate claims against these brokerage firms.
FINRA requires brokers to disclose 23 types of incidents that might give investors concern, such as regulatory sanctions, court and arbitration judgments and bankruptcies. FINRA then publishes these disclosures on its BrokerCheck website. Investors can then search the backgrounds of these brokers but cannot examine the data from a big-picture level.
According to the story, Reuters obtained bulk FINRA data from researchers at the Columbia University Law School Datalab and use the information to compile a list of 48 brokerage firms with the highest percentage of incidents.
Reuters investigators chose to analyze only 12 of the 23 requires FINRA disclosures, choosing to focus on the incidents that might cause investors the most concern. Among the incidents included were criminal convictions, civil judgments or regulatory fines, FINRA arbitration settlements and final judgments, and broker terminations after allegations of misconduct among others.
The investigators then examined firms with at least 20 brokers and FINRA-mandated disclosures between the years 2000 and 2015. Reuters then identified the firms where at least 30 percent of the brokers employed had one or more of the 12 flags.
Many of the listed firms are in New York, but they may have clients all over the country. Many of the brokers at these firms, according to the Reuters story, regularly cold-call customers on the phone with high-pressure sales pitches.
FINRA has an internal list of brokerage firms it deems “high-risk,” but that information is not public. While FINRA and its representatives did not outright confirm or deny that the 48 firms listed in the Reuters story are in its internal list, when executive vice president of regulatory operations, Susan F. Axelrod, was asked if these firms were on FINRA’s list, she said:
“Let’s just say those are not new names to us.”
Further, FINRA CEO Robert W. Cook proposed adding a flag to the BrokerCheck reports of member firms that employ too many brokers who previously worked at firms expelled from the securities industry on June 12, 2017 – the same day the Reuters story was published.
The following is the 48 brokerage firms identified by Reuters listed in order of highest percentage of brokers with disclosed incidents.
48 Firms With Highest Percentage of Brokers With Misconduct Disclosures
Contact Our Firm if You’ve Lost Money
FINRA arbitration is a fast, efficient way to recover your lost investment funds. We work on a contingency fee basis, meaning you pay us nothing unless we win and recover money for you.
If you have invested with any of the 48 firms listed above and have lost money doing so, you may be able to recover some or all of your losses. Our lawyers are experienced in recovering investor losses due to broker and brokerage firm misconduct through FINRA arbitration.
Silver Law Group represents the interests of investors who have been the victims of investment fraud. If you have questions about your legal rights, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.