due diligence

Background check your broker

You work hard for your money. You're diligent about saving for retirement. But when it comes to choosing an investment advisor, are you really being careful enough with your life savings? Do you really know who's managing your money? How do you know they're as reliable as they say they are. Well, the first step you should take before you even think about handing your hard-earned money over to an investment advisor is to use FINRA's BrokerCheck® to make sure you're not dealing with a known crook or fraudster.


The Financial Industry Regulatory Authority (FINRA) is the nation's largest independent regulator of securities firms, and it's BrokerCheck® should be your first stop for pre-qualifying any prospective financial advisor. Through BrokerCheck®, you can now:

  • Search for information about brokers and brokerage firms
  • Search for information about investment adviser firms and representatives
  • Obtain online background reports, if available
  • Link to additional resources such as educational tools for investors

Better still, it's really easy to use. All you need is the broker's name and his or her CRD number. If a broker has run afoul of FINRA in the past, you'll find out about it here--and naturally we at The Green Firm urge you to strongly reconsider working with the offending broker, even if you've heard what a rainmaker he or she is!

FINRA is so committed to getting BrokerCheck® out there that it recently filed a proposal to force member firms as well as affiliated brokers to include a link and description of BrokerCheck® on their websites, social media pages, and any other presence on the internet. Pending SEC approval, you should start seeing direct links to BrokerCheck® popping up everywhere on financial websites. We encourage you to use them!

At The Green Firm, our position is and has always been that we want as much public awareness as possible about FINRA's BrokerCheck® because financial advisors rarely if ever advise their clients that they can search their employment background and complaint history--and the bad ones especially don't suggest it.  Most of the clients we've worked with who have been victims of investment fraud or other forms of stock broker mismanagement had no idea that they could background check their broker.



f you or anyone you know has been a victim of investment advisor misconduct, please contact us immediately for a free consultation.

FINRA's Monthly Blacklist

We don't know about you, but seeing the unjust finally get their due always gives us a boost. hat's in part why we look forward to the release of FINRA's monthly "Disciplinary and Other FINRA Actions" report. This is just what it sounds like, a listing of all the sanctions, fines, suspensions, and other disciplinary actions that have handed down by FINRA against the iniquitous brokers, investment advisors, and brokerage firms who have dis-served or manipulated their customers in so many different ways. It's a long report, but what stood out to us is the recurring appearance of firms who have mishandled private placements in flagrant disregard for FINRA's warnings over the past few years that they would be cracking down on private placements (see 2010 and 2011 "Annual Regulatory and Examination Priorities Letters" as well as Regulatory Notice NTM 10-22 in April 2010.) FINRA was not kidding. Janco Partners, Lincoln Financial, Roth Capital Partners, and the Tidal Group--to name a few--have all suffered penalties as a result of failures to fulfill their obligations related to private placements. If you're not sure or need a refresher on what a private placement is, here's Wikipedia on the subject:

Preview of “Private placement - Wiki..., the free encyclopedia” copy.jpg

Also worth noting in the report is the fact that KMS Financial Services was punished for failing to do its due diligence before letting its broker-dealers sell shares in a dubious hedge fund. Bad on them. FINRA warned you! According to Regulatory Notice 10-22, if a firm knows about a private placement offering, they are required to conduct due diligence to make sure the private placement is suitable for its customers before investing. 

Finally, FINRA also provides listings for individual brokers who have been suspended. It's a long list (see page 17). If you've ever had it in the back of your mind that your broker-dealer ripped you off, why not see if he or she made the list... And then contact us.