FINRA’s BrokerCheck Now Posting Firings More Quickly

Posted on January 20th, 2016 at 5:34 PM

From the Desk of Jim Eccleston at Eccleston Law LLC:

Until December of 2015, brokerages were allowed 15 days to file Uniform Termination Notice for Securities Industry Registration Notices (“Form U-5”) with FINRA. Now, firms are required to report the form to FINRA within 3 days. The Form U-5 is then posted on FINRA’s BrokerCheck website, which contains public record on brokers’ backgrounds and disciplinary histories.

Originally, the 15 day period was given in order for the broker to have an adequate opportunity to offer an explanation for his/her termination. FINRA, which exists primarily to protect investors, feels that a more prompt notice is necessary to keep investors more informed when considering brokers. FINRA is now confident that the three day period is sufficient to both quickly inform investors and allow brokers to simultaneously prepare a statement on the matter.

Indirectly, this change will place extra burden on firms, as quicker turnaround on dismissal information requires more diligence in compliance departments. In the case of a dismissal it is important that the compliance department accurately detail the reason for termination in the U-5. Peter Mafteiu of Sound Compliance Services struggles to see the efficacy in the change. Mafteiu argues that the limited investor use of FINRA’s BrokerCheck does not warrant such an aggressive change to the previous turnaround period. However, FINRA has recently been promoting BrokerCheck on television ads and expects that more investors will visit BrokerCheck. 

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today. 


Related Attorneys: James J. Eccleston

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We just wanted to say thanks for your work in helping us get back some of the money we lost. We are not by any means rich, but we have saved some money and we have done so through a tight-fisted approach to most everything we do. So losing a significant chunk of money hurt…especially at a time when everyone else was growing their accounts. We really appreciate the work you did.

Allan and Adele


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