Internet Access to Brokers Disciplinary Records on Hold

The NASDR announced in January that it would indefinitely postpone releasing brokers disciplinary records via the Internet. The regulator had planned on offering real-time online access to the Central Registration Depository (CRD) early this year.The postponement is due to a concern about the language in a law enacted in 1990. The law provides the NASD with good faith immunity for information disclosed

The NASDR announced in January that it would indefinitely postpone releasing brokers disciplinary records via the Internet. The regulator had planned on offering real-time online access to the Central Registration Depository (CRD) early this year.

The postponement is due to a concern about the language in a law enacted in 1990. The law provides the NASD with good faith immunity for information disclosed via a toll-free number, but does not clearly indicate whether such immunity extends to other modes of communication such as the Internet. The NASD says it intends to seek congressional action to clarify its liability.

Brokers basic registration data is now available online in real time. Disciplinary records can then be requested online and sent by mail or e-mail.

John MacDonald, a securities attorney at Stark & Stark in Princeton, N.J., questions why the NASD had a change of heart since the 1990 law does not specifically address disclosure by e-mail either. Their rationale is a bit skeptical, he says, adding that the system does have numerous inaccuracies.

The delay will not affect the timetable of the new Internet-based CRD filing system scheduled for deployment in August. At that time, the system will shut down for two weeks (see CRD to Shut Down in August, Page 33).

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