Wall St watchdog puts spotlight on firms hiring risky brokers
Published on Jan 2, 2014 10:56 PM
NEW YORK (REUTERS) - Wall Street brokerages that hire stockbrokers who have a track record of misconduct should expect to show examiners how they will curb future wrongdoing, the industry's watchdog said on Thursday in an overview of issues it will review in 2014.
The Financial Industry Regulatory Authority (FINRA) will review the process that firms use to research problem brokers before hiring them, FINRA said. The industry-funded watchdog also wants to know whether the firms take extra measures to supervise the brokers to prevent future misdeeds, such as sales abuses involving client accounts.
FINRA, which routinely examines the industry's nearly 4,200 securities firms to gauge their compliance with securities industry rules, published its annual list of "examination priorities" on Thursday. The regulator also oversees the industry's 636,200 brokers.
Only a "small number" of brokers have engage in a pattern of misbehavior that could harm investors, FINRA said.
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