Being a financial professional – i.e., a registered representative (RR) – regulated by the Financial Industry Regulatory Authority (FINRA) is not easy. When misconduct is alleged against the RR in a complaint to FINRA, whether brought by a customer or the employing brokerage firm, the system that is set up to resolve such allegations and disputes generally treats the RR, at least initially, as “guilty until proven innocent.” Good luck finding a “neutral” fact-finder willing to listen; instead, you will often find an ambitious FINRA staffer, looking for another notch in his or her belt to help their stats and upward mobility. If and when FINRA decides to bring charges against the RR, it helps to have an attorney who can negotiate a reduced punishment against the RR.
To protect investors and market participants, RRs must abide by the securities laws and FINRA’s rules of conduct. But even when a financial professional follows those rules, every RR knows that they remain at the mercy of both customers and their firms, who, with little effort, whether fairly or unfairly, can very easily file a public complaint to put other customers or firms on notice about the RR.
If a customer files a complaint or arbitration against the RR, the complaint is reported to and logged on the RR’s public record of disclosure within the Central Registration Depository (CRD). Any person with Internet access can then view the pending allegations against the RR by visiting BrokerCheck.FINRA.org, where those allegations can additionally surface with a Google search.