Please accept this comment in favor of the proposed rule amendments requiring firms to report allegations of sales practice violations against an individual broker made in arbitration claims or civil lawsuits that do not name the broker as a respondent.
Investor advocates have been seeking the proposed rule amendments for many years, and they are long overdo. Current practice makes little sense in that a one sentence letter saying “Broker Jones cheated me out of $20,000” is reportable yet a ten page statement of claim detailing how Broker Jones cheated me is not. Arguably, the same document might be reportable or not reportable depending upon whether it was mailed to the firm by the claimant as opposed to being served upon the firm by FINRA.
The purpose of the reporting system in the brokerage industry is to put the public on notice of alleged wrongful conduct. There are many tactical reasons why a claimant might choose not to name the offending broker in an action against the firm. Accordingly, the naming or not naming of the broker in such actions is not the appropriate determinate for whether the conduct should be reportable.
Sadler & Hovdesven, P.C.
1155 Hightower Trail
Atlanta, GA 30350