FINRA issued the following statement in response to the PIABA
report: "In March, FINRA issued a Special Notice seeking comment on its engagement programs - including transparency with respect to Board governance.
Berkson and the folks at the PIABA
felt the information supplied in the task force report was incomplete and took pains to offer a clearer picture.
documented similar conflict between advertising and legal position for Merrill Lynch, Fidelity Investments, Wells Fargo, Charles Schwab and Berthel Fischer.
According to the announcement, CCH and SAC recently discovered that PIABA
had set about formally and systematically to extract and duplicate for its own commercial use more than 26,000 arbitration-award documents and other information in a proprietary electronic format from the CCH product.
also announced that Christine Lazaro will be the executive vice president/president-elect.
1, 2007, through mid-May 2009, the PIABA
study found expungement was granted in 89% of the cases resolved by stipulated awards or settlement.
FINRA responded in a statement that the recent increase in expungement requests, as PIABA
noted, is largely attributable to the 2009 change to Forms U4 and U5 that increased the number of customer claims reported against brokers, and consequently increased the number of brokers pursuing expungement relief.
Information that is still not included in BrokerCheck reports, but available from many state securities agencies, include: the circumstances of a broker's termination of employment (especially when the broker quits during the course of his firm's investigation of his conduct), bankruptcy filings, tax liens and test scores, PIABA
, a group of lawyers who represent investors in cases against securities firms, would also like to see "any savings associated with the implementation passed along those using the arbitration process," Berkson said.
The arbitration award "is meaningless if the broker or brokerage firm does not have the resources to pay the award," Hugh Berkson wrote in the PIABA
The letter notes that PIABA
, which represents investors in disputes with the securities industry, went to court to compel the Securities and Exchange Commission to release certain arbitration data under the Freedom of Information Act, but the request was denied.
states in its report that the extent of omitted "red flag" background information in BrokerCheck is "so serious that unwitting investors relying on the online database may very well select brokers with whom they would not do business if they had access to the more complete picture available to FINRA but now being hidden.