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Is Your Broker on the Sec Naughty List?

The Securities and Exchange Commission (SEC) is creating a website with a searchable database that lists suspended or barred brokers who have committed federal securities law violations. The database is intended to help investors identify bad brokers and financial advisors and arm them with information that helps them protect themselves from fraud.

SEC Violations Database

The website features a searchable database that will make prior violations of brokers and advisors and repeat offenders more visible to investors so they can take steps to help protect themselves from fraud. The SEC violations database will compile certain data on barred or suspended brokers and financial advisors and show potential investors how to conduct a background check on brokers before they invest by using FINRA's BrokerCheck.

Within the investment community, some brokers and advisors use unethical tactics to entice investors. They often have fake credentials that make them appear more professional, and they give misleading advice on investments to inflate their fees and commissions. Unregulated brokers with prior complaints and securities violations are not required by law to disclose violations to their clients. The new SEC database may help protect investors from brokers who have committed prior offenses and received violations for their actions.

Securities fraud can be committed in a variety of ways, including misrepresenting important information that investors use to make decisions about their investments. Fraudsters try to deceive investors by offering bad advice, providing false information, withholding key information, and improperly claiming to act on inside information. According to the FBI, criminal cases involving securities fraud often includes:

  • Ponzi schemes
  • Pyramid schemes
  • Hedge fund fraud
  • High yield investment fraud
  • Broker embezzlement
  • Foreign currency fraud

Ponzi schemes and pyramid schemes typically use funds furnished by new investors to pay returns promised to prior investors. High yield investment fraud usually guarantees investors high rates of return with little or no risk. Investments often include securities, commodities, and real estate. The FBI warns investors of high-pressure sales tactics and unsolicited offers by fraudulent brokers. They advise against giving into demands for personal information such as social security numbers and credit card information.

If you were the victim of investment fraud, our attorneys at Meyer Wilson are ready to help. Call us at (800) 738-1960 to speak one of our lawyers today, or send us your information to request a free consultation.

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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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