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U.S. Markets

Massachusetts securities regulator hunts for 'rogue' brokers

BOSTON (Reuters) - Massachusetts’ top securities regulator is seeking information from 241 brokerage firms to keep “rogue” brokers out of his state, he said on Monday.

Commonwealth Secretary William Galvin said he sent letters to firms in which more than 15 percent of their current representatives have at least one current disclosure incident on their records.

“This exceeds the average percentage found among all Massachusetts-registered broker-dealers,” Galvin said in a news release. Disclosure incidents can involve allegations from disputes headed for arbitration to illegal conduct.

The news release did not say what Galvin’s next steps would be.

“My office diligently works to keep the bad actors out of the Commonwealth,” Galvin said. “... This sweep is intended to establish how the industry is meeting this critical investor protection responsibility of keeping the rogue broker out of the industry.”

Galvin sent letters asking the undisclosed broker-dealer firms for hiring information dating back to Jan. 1, 2014. His office is looking for the number of representatives terminated or placed on heightened supervision during that period.

The firms have until June 20 to respond.

Reporting by Tim McLaughlin; Editing by W Simon and Lisa Von Ahn

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