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Is Your Broker a Felon?

A recent analysis from the Wall Street Journal has revealed alarming news about stockbrokers who fail to disclose discrepancies about their financial and criminal history – there are a lot of them. According to the WSJ analysis, more than 1,600 stockbrokers were found to have histories involving bankruptcy filings and criminal charges that were not disclosed to investors.

Failing to disclose pertinent information and red flags about a stockbroker's financial and criminal background is a direct violation of regulations. Because these pieces of information can indicate a great deal about a stockbroker's character, professional abilities, and ethical conduct, they are often considered "red flags." The same brokers found to have had undisclosed bankruptcies or criminal charges on their record, for example, were also found to have accumulated more complaints from clients and more disciplinary actions than other brokers, according to the WSJ analysis. One broker profiled in the WSJ article – who had racked up a bankruptcy, tax lien, judgment for unpaid debts, and a criminal conviction that were not disclosed to investors– reportedly cost a 75-year-old client his life savings.

In a fair and ethical marketplace, investors have the right to know about the character of the brokers with whom they work and to whom they entrust with their money. The Financial Industry Regulatory Authority (FINRA) requires brokers and brokerage firms to report a number of issues, including any bankruptcies and certain criminal charges. These typically include felony charges, finance-related allegations, and certain misdemeanor charges. Investors are able to view such information on FINRA's BrokerCheck®. The fact that many brokers' records seeped through the cracks indicates a serious failure by firms and authorities who regulate the brokerage business. Regulators have commented that failures to report are unacceptable, and that efforts will be made to bring disciplinary actions where appropriate.

At Meyer Wilson, our team of investment fraud lawyers is committed to helping investors who have suffered financial harm at the hands of stockbrokers and brokerage firms recover their losses. If you believe you have a case involving investment misconduct – including losses committed by brokers who did not properly disclose their financial or criminal backgrounds – our firm can help. Meyer Wilson represents clients nationwide from offices in Ohio and California.

To learn more about your case and rights, call 888-390-6491.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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