A study released Thursday showed that the Financial Industry Regulatory Authority "routinely deletes" problematic information that should be highlighted on stockbrokers in data released to investors, The Wall Street Journal said.
The Public Investors Arbitration Bar Association, a group of lawyers who represent investors in claims against brokers, found that FINRA omitted data such as brokers' flunked tests and potential sales abuses from its online database BrokerCheck, the Journal said.
The association compared information on BrokerCheck and the FINRA database, which the Journal said is accessible only from a few states with strong freedom-of-information laws.
PIABA discovered that BrokerCheck often did not include information older than a decade on whether brokers had failed industry qualification exams, satisfied federal tax liens and personal bankruptcy filings, the Journal said.
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In response to the PIABA study, FINRA said in a statement to the Journal that the system was not perfect and that it did publish information selectively as it considered what is appropriate and fair. Investors should check BrokerCheck as well as consult state securities regulators, FINRA said.
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