Check Out Your Broker

You may look like prey to a wily, unscrupulous broker, out to convince trusting folks to part with their money. But you don't have to be a victim. Meet NASD. In its own words:

NASD has long served as the primary private-sector regulator of America's securities industry.... NASD licenses individuals and admits firms to the industry, writes rules to govern their behavior, examines them for regulatory compliance and disciplines those who fail to comply ... We also operate the largest securities dispute resolution forum in the world, processing over 4,600 arbitrations and nearly 1,000 mediations a year.

Sound good? Wait -- it gets even better. Our friends at NASD recently spiffed up their "BrokerCheck" program, offering us investors more information on brokerages and individual brokers, along with a more pleasant experience tapping NASD resources. You'll find NASD's BrokerCheck at this website, or you can access the service by phone at 800-289-9999.

According to NASD, last year BrokerCheck hosted more than 4.7 million searches. The database contains information on thousands of active firms, hundreds of thousands of registered brokers, and even a host of firms and brokers no longer registered with the agency.

Among other useful features, you can now:

  • Access BrokerCheck 24 hours a day online.
  • Find information on firms or individuals more easily.
  • Immediately get details about "disclosure events" (including criminal actions and customer complaints).
  • Learn more about what these events mean.
  • Look up 10-year employment histories for brokers, as well as bankruptcy proceedings and employment terminations.
  • See which exams an individual has passed.

A sample search brought up the listed broker's current employer; whether the broker had any events disclosed, or was currently suspended or inactive with any regulator; and where the broker was registered.

If you have a broker working for you, or are considering hiring a new broker, look him or her up and check for red flags. At the very least, you'll learn a little more about the professional to whom you're entrusting your hard-earned money.

Find the best brokerage
Meanwhile, make sure that the brokerage you're using is best for your needs. Odds are, you can find a better brokerage that charges you less or offers more services. Spend a few minutes in our Broker Center, look at our comparison table, or check out our Foolish guide to finding the right brokerage.

And as long as you're at the NASD's website, check out the latest news on which firms have run afoul of the agency. Wells Fargo (NYSE: WFC  ) got fined for failing to disclose that one of its analysts took a job with a company he covered. Fines have been imposed for other reasons on several companies, including HSBC (NYSE: HBC  ) , Raymond James Financial (NYSE: RJF  ) , Bank of America (NYSE: BAC  ) , and Wachovia (NYSE: WB  ) .

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. Bank of America is a Motley Fool Income Investor recommendation. Try any one of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.


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