Products August 7, 2007

New Company Protects against Broker Misconduct and Scams

Former Securities and Exchange Commission (SEC) Enforcement Branch Chief and consumer advocate Pat Huddleston has launched Investor's Watchdog, a company that provides investors with intelligence and expertise to protect them from broker misconduct, excessive risk, and professionally-disguised investment scams.
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Investor’s Watchdog provides consumers with information about individual brokers, the employing firm’s reputation for supervising its brokers, and the promoters of unregistered investments that can be professionally disguised scams, according to the announcement. Additionally, the Investor’s Watchdog Web site – www.investorswatchdog.com – provides users with various educational resources for practical advice and information related to protecting investments.

The Investor’s Watchdog Broker Safety Rating is a scoring system that blends Huddleston’s SEC-trained analysis with brokers’ education, employment history, and disciplinary record, the announcement said. The Investor’s Watchdog Database includes information on actions against stockbrokers that will not appear on reports issued by the Financial Industry Regulatory Authority (FINRA), including actions expunged from a broker’s FINRA file and the results of customer surveys completed by other Investor’s Watchdog customers who have used the same broker.

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Services provided by Investor’s Watchdog include:

  • BrokerSnapshot Report – provides a one-time, complete background of the broker and includes the Investor’s Watchdog Broker Safety Rating
  • QualifEye Report – provides background and recommendations to anyone considering a hedge fund, limited partnership or other non-registered investment
  • Winnow Service – provides quarterly updates and Broker Safety Rating reports that can reveal troubling broker behavior before it reaches the client’s account
  • WinnowPlus Service – provides immediate phone and/or e-mail communication to discuss red flags that are uncovered in the quarterly Winnow report, and
  • Constant Patrol Subscription – provides monthly Broker Safety Rating reports, one QualifEye analysis per year, daily searches of the Investor’s Watchdog database, and instant notification of new information about the broker

Huddleston launched the company with the belief that investment fraud is set to reach unprecedented levels, given the coming boom in retirees and senior citizens, many of whom have built significant resources, and that the advice most often given for how to check a stockbroker’s background is somewhat flawed because a record that looks clean may be “whitewashed.’

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