PIABA Issues Report On BrokerCheck’s Shortcomings

 PIABA, the Public Investors Arbitration Bar Association, issued a new report stating that FINRA's BrokerCheck, the primary resource the public uses to learn about brokers and their firms, fails to include vital information, including the reasons a financial professional's employment was terminated and other details investors should have before deciding whether to invest with them. The PIABA report says that information about bankruptcies, tax liens, and scores on relevant industry examinations also should be included on the system. The PIABA report additionally states that after the group published a March 2014 report that first criticized FINRA's broker information repository, the self-regulatory organization “made things worse” by spending millions to fund an advertising campaign to encourage investors to use the system. “FINRA cannot be allowed to continue to hype a broken system it knows is of limited utility,” said Hugh D. Berkson, president of PIABA and a report co-author. FINRA responded to the report, saying it is always looking for ways [...]

PIABA: Investors Owed Millions In Arbitration Awards Unable To Collect

According to the Public Investors Arbitration Bar Association (PIABA), FINRA is failing to help investors collect arbitration awards for damages from the brokers. Seventy-five FINRA arbitration awards, about a third of the 2013 total, are unpaid according to a report released by PIABA. That is $62 million in award money or about 25% of the total owed to investors for damages that year. PIABA, which is a not-for-profit bar association of attorneys who represent investors in securities arbitration and litigation, stated that those findings were "unconscionable." PIABA further claims that FINRA, which usually does not publish the percentage of total awards that go unpaid each year, is not doing enough to help the problem. The report claims that the majority of brokerage firms are underfunded, placing aside a "surprisingly" small amount of net capital that could be used to make those payments. "The arbitration award is meaningless if the broker or brokerage firm does not have the resources to pay [...]