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How to find out if your broker has a murky past

By November 21, 2017December 7th, 2017Stock Broker

Many investors rely on the reputations and credibility of large, well-established firms and assume that the firms are closely supervising their brokers to prevent any misconduct regarding their accounts and investments.  While most brokers and financial advisers may be reliable and trustworthy, how can we rest assured that our investment adviser doesn’t have a past history of fraud, negligence, or other misconduct?

It turns out there is a simple way to check. Just use FINRA’s BrokerCheck found at

Here at Fishman Haygood, we use BrokerCheck to review the histories of brokers and advisers when clients bring complaints and to see what actions FINRA may have taken on certain matters. It’s very user friendly.

Below is our “how to guide” for navigating the Broker Check.

Step 1: Enter the info

Once you are on the BrokerCheck site, enter the name of the broker. If you know the brokerage name or state, you can enter that information as well. In this case we’ll use good old Bernie Madoff as our example.

Click Search.

Step 2: View results

You can see with the one result here, that Bernie is barred from trading. He’s categorized as a “previously registered broker.”

Click “more details.”

Step 3: Looking at the charges filed against your broker

What pops up next is essentially the career history of your investment adviser, with a timeline that outlines the firms or brokerage houses that employed the adviser. In the case of Bernie, there is just one firm, Madoff Investment Securities, L.L.C.

The timeline also shows you the frequency of filings against the broker. You can see here that when you scroll over the red circles that– wow, there are a lot of charges brought against him in 2008 and 2009! The specific charges filed pop up.

Step 4: Learning the outcome

Either by clicking the red circles, or by scrolling down below the timeline, you can find the outcome of the charges brought against the broker.

By clicking each charge, more detail is provided regarding the types of fraud, negligence, or other misconduct that led to charges being brought against the broker.

In Madoff’s case, the charges are numerous, but for one example, we see here that on December 11, 2008 the United States Securities and Exchange Commission initiated charges against Madoff.

Step 5: What to do with the information

Just because a broker or adviser has a charge against them in the past doesn’t necessarily mean that they are committing fraud or acting negligently now. BrokerCheck also notes which cases are dismissed or settled.

But you can use FINRA’s Broker Check to consider who is managing your investments. Be wary of financial advisers who have multiple charges against them, or seem to bounce from brokerage house to brokerage house.

You can also use this tool to check up on your adviser, especially if you have suspicions of wrongdoing. Several charges brought recently against your broker could be a red flag.

If your broker’s activities seem a little suspicious to you, an effective business and litigation lawyer can help you determine your options. Contact Fishman Haygood to learn what actions you may be able to take.


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