Investigating Stockbrokers and Financial Advisers was originally held April 9, 2014. Learn whether stockbrokers or investment advisers have run afoul of regulators or been the subject of customer complaints. This one-hour webinar will guide you, step-by-step, through the FINRA BrokerCheck database and the SEC’s Investment Adviser registration database, which contain records on 1.3 million current and former professionals. You’ll also learn how state securities regulators police the industry and how to obtain results of their investigations for your stories. Reporters can conduct this research for free on any computer with an Internet connection; no special software or database knowledge is needed. WHAT YOU WILL LEARN Find regulatory penalties and employment history of stockbrokers and investment advisers using free databases. Understand how the SEC, state regulators and industry regulatory groups supervise Wall Street, and how to get your hands on their findings. Decode regulator-speak and find key “red flags” in these filings, such as “10b5” fraud and unsuitable investment cases. YOUR INSTRUCTOR Rob Wells is a lecturer at the Philip Merrill College of Journalism at the University of Maryland and a former Reynolds Visiting Professor in Business Journalism at the University of South Carolina. A former SEC beat reporter, Wells used the FINRA and SEC databases in an extensive computer-assisted reporting project. For more information about training for journalists, please visit http://businessjournalism.org.

1. Title Slide
Inves&ga&ng
Stockbrokers
&
Financial
Advisers

2. Poll
Ques&on
#1
Have
you
researched
a
stock
broker’s
records?
• Yes
• No

3. • Unsuitable
Investments
• Churning
• 10b5
• Breach
of
Fiduciary
Duty
Photo
by
Flickr
user
Victoria
Reay
Red
Flags

4. Research
Brokers,
Advisers
FINRA
BrokerCheck
-­‐-­‐Records
on
637,000
current
and
former
professionals,
4,700
firms.
SEC’s
Investment
Adviser
Public
Disclosure
(IAPD)
-­‐-­‐25,000
professionals
Cer&fied
Financial
Planner
Board
of
Standards
Inc.
(CFP)
-­‐-­‐69,000
professionals

5. FINRA
BrokerCheck
FINRA
(Financial
Industry
Regulatory
Authority):
Industry
group
that
licenses
and
polices
stock
brokers.
FINRA:
An
SRO.
Works
with
and
is
overseen
by
SecuriVes
and
Exchange
Commission

6. FINRA
BrokerCheck
Quick
Ques&on:
Ever
heard
of
CRD?
Type
Y/N
or
the
defini&on
Data
derived
from
CRD:
Central
RegistraVon
Depository
Launched
1981

7. First
Screen

8. Star&ng
Your
Search
Having
a
CRD
number
speeds
your
search.
CRDs
available
on
complaints,
arbitraVon
records
Click
for
person

9. Get
Full
Name,
Middle
Ini&al,
Etc.
Get
Full
Name
of
Your
Broker.
Thousands
of
people
in
database,
may
take
Vme
to
find
right
person.
Filter
with
Zip
Code

11. Quick
Chat:
IdenVfy
the
RED
FLAG
in
this
filing.
Answer:
NOT
REGISTERED.
WHY?

12. Your
Turn
Time
for
some
repor&ng…

13. Search:
“Bernard
Madoff”
Go
to
a
separate
tab
on
web
browser
and
pull
up
this
link:
h_p://www.finra.org/Investors/ToolsCalculators/BrokerCheck/
Photo
by
Flickr
user
Petezin

14. The
document

16. Which
secVon
has
the
juiciest
details?
• Report
Summary
• Broker
QualificaVons
• RegistraVon
and
Employment
History
• Disclosure
Events
Poll
Ques&on
#2

17. For
Firms:
• Overview
of
the
firm,
and
ownership
• History,
including
any
mergers
or
name
changes
• Summary
of
firm’s
operaVons,
list
of
fines,
regulatory
acVons,
arbitraVon
awards
For
Individuals:
• Broker
credenVals,
current
registraVons,
licenses
and
exams
• Employment
history
for
the
past
10
years
• Any
customer
disputes
or
regulatory
events
on
the
broker’s
record.
Key
Items
on
CRD
Reports

18. Employment
History

19. Details
of
Ac&on
Get
source
material
Details
of
Case

20. Quick
Chat
Ques&on
Type
a
word
or
phrase
into
the
chat
box:
Describe
other
ways
to
use
Broker
Check
as
a
repor&ng
tool.

21. Backgrounding
Source:
The
Washington
Post

22. Contact
Former
Co-­‐Workers:
Work
History

24. Double
Check
BrokerCheck:
Full-­‐Text
of
Arbitra&on
Filings:
hep://finraawardsonline.finra.org/search.aspx?
-­‐-­‐Material
linked
in
BrokerCheck
but
worth
searching.
Finra
Disciplinary
Ac&ons
Database
(FDA):
hep://disciplinaryacVons.finra.org/
-­‐-­‐Material
summarized
in
BrokerCheck,
access
to
raw
complaints

25. BrokerCheck
to
Cover
Poli&cs
Chat
Box
Ques&on:
Poli&cians
Who
Were
Brokers?

26. Your
Turn:
Search
“Jon
Corzine”

29. FINRA:
Not
Perfect!

30. Red
Flags
• ArbitraVon
cases.
What
happened?
• Employment
history.
RegistraVon
gaps;
where
were
they?
• Brokers
can
peVVon
to
remove
arbitraVon
cases.
Photo
by
Flickr
user
Victoria
Reay

31. Investment
Adviser
Public
Disclosure
hep://www.adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx

32. What
Is
An
Investment
Adviser?
• An
arbitrary
term
for
a
money
manager
• Same
as
a
financial
adviser
• A
unlicensed
Wall
Street
person
• All
of
the
above
• None
of
the
above
Poll
Ques&on
#3

33. Regulated
by
SEC
or
states
Dodd-­‐Frank
Act:
Boosts
states'
role
in
regulaVng
advisers
• States
regulate
advisers
handling
between
$25
million
and
$100
million
of
assets
under
management.
• SEC
oversees
handling
assets
of
$110
million
• Both
can
be
found
in
Investment
Adviser
Public
Disclosure
database.
Investment
Advisers

34. Form
ADV
Main
Disclosure
Form
for
Investment
Advisers
• Part
1:
Summary
of
adviser's
business,
complaints
from
customers.
• Part
2:
Brochure
to
clients
,
details
adviser’s
business
pracVces,
fees,
conflicts
of
interest,
and
disciplinary
informaVon

35. State
securi&es
regulators
North
American
Securi&es
Administrators
Associa&on
• Always
worth
checking
with
state
regulators
• Great
way
to
monitor
local
and
naVonal
trends

36. State
Enforcement
hep://www.nasaa.org/regulatory-­‐acVvity/enforcement-­‐legal-­‐acVvity/enforcement-­‐directory/

37. NYT
story
on
LPL
Financial
-­‐-­‐
Uses
state
regulators
as
sources
hep://nyV.ms/14PiIdR

38. Cer&fied
Financial
Planners
• CFP
®
designaVon
• Must
pass
series
of
exams
• Subject
to
oversight
of
CerVfied
Financial
Planners
Board
• Investor
complaints
can
lead
to
CerVfied
Financial
Planner
revocaVon

39. CFP
Board
website
lists
revoked
planners
by
state

40. Search
for
a
Cer&fied
Financial
Planner
hep://www.cfp.net/uVlity/verify-­‐an-­‐individual-­‐s-­‐cfp-­‐cerVficaVon-­‐and-­‐background

42. Example
of
Disciplinary
Record

43. Chat
Box:
Number
of
CFP
RevocaVons
in
Maryland?
hep://www.cfp.net/about-­‐cfp-­‐board/ethics-­‐
enforcement/disciplined-­‐individuals-­‐by-­‐state
Your
Turn

44. Alphabet
Soup:
Financial
Professional
Titles
“The
requirements
for
obtaining
and
using
these
&tles
vary
widely,
from
rigorous
to
nothing
at
all.”
-­‐-­‐
SEC
hep://www.finra.org/Investors/ToolsCalculators/ProfessionalDesignaVons/
AccreditedDesignaVons/

45. Rob
Wells
University
of
Maryland,
Philip
Merrill
College
of
Journalism
robwells@umd.edu
Ques&ons?
Photo
by
Flickr
user
Xurble