Pennsylvania Securities Commission Urges Adviser Background Checks

Officials at the PSC said the Madoff Ponzi scheme and other high-profile breaches of trust by financial professionals are strong reminders of the need to check the background of financial professionals before trusting them with your money.

“Information is the number one tool that the public can have to protect them against fraud,” said Securities Commission Chairman Robert Lam, in a press release. “It’s an easy and simple process for any citizen to call our office and find out if a broker or security salesperson is licensed and in good standing. That’s a sound first step in thoroughly researching any investment opportunity, large or small.”

The PSC said it offers investors extensive employment, disciplinary, and registration information about stockbrokers and investment advisers. Anyone can request a public report of background information on any stockbroker, brokerage firm, investment adviser, and investment adviser firm registered to do business in the state.

Consumers can receive background information by calling the PSC at 717.787.8061 or 1.800.600.0007. Callers should ask for all materials from the Central Registration Depository (CRD) about a brokerage firm or its agents. For similar information about an investment adviser firm or its representatives, callers should ask for all materials from the Investment Adviser Registration Depository (IARD).

The computerized national databases contain licensing and registration information on more than 650,000 stockbrokers and more than 260,000 investment advisers. Files include information about employment, examination and disciplinary histories, civil judgments, arbitration decisions, criminal convictions, bankruptcies, as well as customer complaints, disciplinary actions, arbitration and civil proceedings, according to the PSC.

FINRA recently unveiled an expansion of its BrokerCheck service to make records of final regulatory actions against brokers permanently available to the public (see “FINRA Proposes Disciplinary Disclosure of Former Brokers’).