Financial Industry Regulatory Authority Central Registration Depository (CRD) Database

FINRA CRD stands for Financial Industry Regulatory Authority Central Registration Depository. It is a database used by the securities industry to track the registration and licensing information of securities firms and brokers through a FINRA CRD number.

FINRA, a self-regulatory organization that oversees the securities industry in the United States, maintains the FINRA CRD. The database contains information on the professional backgrounds of brokers, investment advisors, and other securities industry professionals. 

Broker-dealer firms and their associated persons are required to register with FINRA and have their information included in the CRD. The information in the CRD includes personal information, education, employment history, disciplinary actions, and regulatory filings. 

This allows investors to research the background of brokers and investment advisors before investing their money, and it helps regulators to monitor and enforce compliance with securities laws and regulations. 

What is a FINRA CRD Number? 

FINRA requires all registered individuals and firms in the securities industry to have a CRD number. By knowing your broker’s CRD number, you can ensure that they are properly registered with FINRA and are in compliance with regulatory requirements. 

The BrokerCheck tool is a public online database that provides information about brokers and firms registered with FINRA. You can use your broker’s CRD number to look up their background and disciplinary history on BrokerCheck, which can help you make informed decisions about whether to do business with that broker.

Disclosure Events on a CRD Record

Disclosure events on a broker’s record refer to any incidents or events that must be disclosed by the broker on their Form U4, which is a Uniform Application for Securities Industry Registration or Transfer. These events typically include regulatory actions, customer complaints, arbitrations, terminations, bankruptcies, criminal charges, and civil judgments.

Disclosure events are important for investors to assess the broker’s history and potential risks associated with working with them. When investors research a broker’s background using tools like FINRA’s BrokerCheck, they can review these disclosure events to make informed decisions about whether to engage with that broker.

Examples of Disclosure Events on FINRA CRD

• Customer Complaints: Complaints filed by clients alleging misconduct, such as unauthorized trading, misrepresentation, or unsuitable investment recommendations.
• Regulatory Disciplinary Actions: Actions taken by regulatory authorities such as FINRA or the SEC against the broker for violations of securities laws or regulations. This could include fines, suspensions, or even barring from the industry.
• Arbitration Awards: Decisions made by arbitration panels in disputes between the broker and clients or other parties. These awards may involve monetary damages or other remedies.
• Criminal Charges or Convictions: Any criminal charges or convictions related to financial crimes or other offenses.
• Employment Separation After Allegations: Instances where the broker was terminated or resigned from a firm while under investigation for alleged misconduct.
• Financial Judgments or Liens: Legal judgments or liens against the broker related to debts or financial obligations.
• Bankruptcies: Declarations of bankruptcy by the broker, which may indicate financial difficulties.
• Regulatory Examinations: Records of regulatory examinations conducted by authorities such as FINRA or the SEC, which may reveal findings of non-compliance or deficiencies.
• Educational Background: Information about the broker’s educational qualifications and certifications, including any disciplinary actions related to educational credentials.
• Civil Litigation: Involvement in civil lawsuits related to securities fraud, breach of fiduciary duty, or other legal disputes.

On a broker-dealer’s Central Registration Depository (CRD) record, disclosure events typically refer to incidents or events related to the broker-dealer itself, rather than individual brokers. These events may include regulatory actions taken against the broker-dealer by regulatory authorities, customer complaints filed against the broker-dealer, arbitrations involving the broker-dealer, bankruptcies, civil judgments, and other similar matters.

Just like with individual brokers, disclosure events on a broker-dealer’s CRD record are important for investors to assess the broker-dealer’s history and potential risks associated with conducting business with them.

What do Arbitrations mean on a Brokerage Firm’s FINRA CRD?

A broker-dealer may have arbitrations listed on its Central Registration Depository (CRD) for several reasons:

Customer Disputes: These are the most common types of arbitrations and involve disputes between the brokerage firm and its customers. Investors can file a complaint for various reasons, including allegations of unauthorized trading, unsuitable investment recommendations, breach of fiduciary duty, misrepresentation, failure to execute trades, or failure to supervise.

Employment Disputes: Arbitrations may also arise from securities employment disputes between the brokerage firm and its current or former employees. These disputes might involve issues such as wrongful termination, discrimination, harassment, breach of contract, or disputes over compensation.

Inter-Broker Disputes: Arbitrations can occur between different brokerage firms or individual brokers. These disputes might involve claims related to compensation agreements, recruitment practices, non-compete clauses, or other contractual matters.

Regulatory Actions: In some cases, FINRA or the SEC may initiate arbitration proceedings against a brokerage firm for alleged violations of securities laws or regulations. These actions could result in fines, sanctions, or other disciplinary measures.

Industry Disputes: Arbitrations may also involve disputes between brokerage firms and other entities within the financial industry, such as investment advisers, clearing firms, or financial institutions. These disputes might relate to contractual agreements, business practices, or regulatory compliance issues.

Easy Way to Check out your Broker

Knowing your broker’s CRD number can help you ensure that they have a clean disciplinary record and have not been the subject of any regulatory actions that could put your investments at risk. 

This can help you make informed decisions about who you choose to do business with, in the securities industry, and can provide you with valuable information to protect your investments and financial interests. 

How to use BrokerCheck with a FINRA CRD number

BrokerCheck is a publicly available online database provided by FINRA that allows investors to research the background of brokers and investment firms registered with FINRA. Here’s how you can use BrokerCheck and the CRD number: 

1. Visit FINRA’s BrokerCheck website: Go to FINRA’s BrokerCheck website and enter the name of the broker or firm you want to research. 
2. Identify the correct broker or firm: BrokerCheck may return multiple results for a given name. Look for the broker or firm that matches the information you have, such as location or CRD number. 
3. Access the broker or firm’s profile: Click on the name of the broker or firm you want to research to access their profile. 
4. Review the broker or firm’s information: The profile will contain information such as the broker or firm’s CRD number, registration status, employment history, and disciplinary history. You can use this information to evaluate the broker or firm’s background and determine whether they are a good fit for your investment needs. 
5. Use the CRD number for additional searches: If you have the broker or firm’s CRD number, you can use it to perform more targeted searches on BrokerCheck. For example, you can use the CRD number to search for regulatory actions or complaints filed against the broker or firm. 

By using BrokerCheck and the CRD number, you can access important information about brokers and firms in the securities industry and make informed decisions about who to do business with.  

National FINRA Attorneys 

FINRA attorneys specialize in the laws and regulations governing the financial industry, particularly those related to securities and investments.

A FINRA attorney’s primary responsibility is to represent clients who are involved in legal disputes or regulatory investigations with FINRA.  

If you have a securities related dispute, the FINRA attorneys at the White Law Group may be able to help you.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.     

Free Consultation

For a free consultation with a securities attorney, please call the offices of the White Law Group at 888-637-5510 for a free consultation.  

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.  

For more information on The White Law Group, and its representation of investors, please visit WhiteSecuritiesLaw.com.  

 

  

Tags: Broker CRD number, BrokerCheck, CRD number, Financial Industry Regulatory Authority Central Registration Depository., FINRA CRD, What is BrokerCheck, what is CRD Last modified: March 15, 2024