NEW YORK (Reuters) - The head of the Financial Industry Regulatory Authority told a congressional committee on Thursday that FINRA overhauled its policy on allowing public access to information it has on brokers’ professional and financial records and will allow the public to download the information in bulk.
Speaking to the U.S. House subcommittee on Capital Markets, Securities and Investments, FINRA chief Robert Cook said the securities industry self-regulator’s Brokercheck.com was originally set up to let investors check their broker’s history.
“We are collectively realizing that there is potential opportunity to have them see patterns at the firms,” Cook told the subcommittee of the House Financial Services Committee.
He did not say exactly when the change occurred.
Massachusetts Congressman Stephen Lynch said he was concerned that this policy was preventing FINRA from giving investors information they need to choose firms that will give them sound financial advice.
“If I wanted to wanted to avoid a firm that was toxic and that had a large number of brokers who are violating your rules I wouldn’t be able to do that ... in the current form,” Lynch told Cook.
FINRA requires brokers to disclose to investors regulatory run-ins, legal disputes or personal financial difficulties, among other things.
Reuters analyzed 15 years’ worth of data on the disclosures of every broker registered with FINRA from 2000 to 2015. The information was supplied by researchers at Columbia University Law School DataLab who wrote computer code to extract it from the regulator’s website.
The analysis, which Reuters updated to include data from 2016 and 2017, found that there were 48 brokerages in which more than 30 percent of brokers had a regulatory violation or financial difficulty on their records.
Reporting By Elizabeth; Editing by Dan Grebler