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Massachusetts Looks to Hammer Shady Brokers

Massachusetts Looks to Hammer Shady Brokers

The top 241 firms in Massachusetts with an above average number of reps with misconduct reports on their records are being audited. Secretary of the Commonwealth, William Galvin has requested the firms hand over their hiring information. The letter being sent out, commonly referred to as a “sweep”, is to help the governing body understand brokerdealer hiring policies and procedures.

According to Galvin, the goal is to rid the commonwealth of the bad apples. He stated, “We need and expect the brokerdealer community to assist us by aggressively policing and monitoring their own workforce. This sweep is intended to establish how the industry is meeting this critical investor protection responsibility of keeping the rogue broker out of the industry.”

Don’t Hire Rogue Brokers

Galvin’s words run parallel with other security regulators agendas. In a recent speech, Finra chairman and CEO Richard G. Ketchum stated, “Brokers with checkered backgrounds can undermine a firm’s culture and turn it into a place that harms investors.”

Firms that hire such brokers, will be burden with much more responsibility if compliance problems arise. Earlier this year, Finra announced a target operation, designed to examine and evaluate brokerage firm culture.

The Massachusetts sweep is seeking hiring information from January 2014 to present. It also requests that firms provide the number of brokers fined, fired, or placed on heightened supervision during that time frame. The sweep letter went to firms in which 15% of their current reps have at least one incident on their record.

Let Starr Austen Protect You From Rogue Brokers

Broker fraud is a serious offense and can leave you empty handed. Our team of investment fraud lawyers have experience in representing clients who have purchased unsuitable annuities and will fight for the protection of investors and handle cases involving unsuitability, securities arbitration misrepresentation, overconcentration, broker fraud , negligence and breach of trust.