Brian Smiley quoted in New York Times on broker disclosure rule.
The board of the National Association of Securities Dealers is expected to announce today that it has approved a plan to make more information publicly available about disciplinary action against brokerage firms and their registered representatives.Under the proposal, which board members took up late yesterday at a meeting in Carefree, Ariz., the Central Registration Depositary system would provide final arbitration decisions and the size of penalties assessed against brokers and brokerage firms. The public can reach the system through a toll-free telephone number.
Established in 1981, the system now contains information on displinary actions taken against brokers by a number of exchanges and regulatory authorities, including the American and New York Stock Exchanges, the Chicago Board Options Exchange, the dealers’ association and the S.E.C.
The system also provides information about criminal convictions reported to the dealers’ association by the securities industry and the Justice Department.
If approved by the association’s board, the change would require ratification by the S.E.C. to take effect.
If those hurdles are crossed, the additional information would become available in late spring or early summer, said Jim Spellman, a spokesman for the association.
Not surprisingly, the move to make more disciplinary information about brokers and brokerage firms to the public was applauded by lawyers who represent investors in disputes.
“The more information that is presented the better the system operates, because a lot of people rely on it,” said Brian Smiley, a lawyer at Page & Bacek , a law firm in Atlanta. “Clearly, investors have an interest in knowing if their broker has an adverse decision against him, or even a criminal indictment.”
In October 1991, the association set up a toll-free telephone number to make the disciplinary information available through the Central Registration Depositary system. That number is 800-289-9999.
By Kenneth N. Gilpin