WealthManagement Magazine

On-line CRD Debuts

The NASDR in late March began making basic employment and licensing information about brokers available over its Web site (http://www.nasdr.com/2000.htm).Despite some press reports to the contrary, the information given is bare bones: the broker's name, CRD number, the states in which the broker is currently licensed, and current and past employment. Similar information also is available about brokerage

The NASDR in late March began making basic employment and licensing information about brokers available over its Web site (http://www.nasdr.com/2000.htm).

Despite some press reports to the contrary, the information given is bare bones: the broker's name, CRD number, the states in which the broker is currently licensed, and current and past employment. Similar information also is available about brokerage firms.

The Web-based database includes all brokers who've maintained an active license with the NASD since March 1, 1995.

Full records containing pending customer complaints, settlements above $10,000, suspensions, arbitrations, etc., won't be uploaded to the Web site's database until sometime in the third quarter, says Nancy Condon, an NASDR spokesperson. Until then, users have to request a copy of a full disciplinary report via return E-mail, fax or via the NASDR's toll-free number (800/289-9999).

Meanwhile, reps and firms have been reviewing their CRD reports and making corrections or adding explanations. The NASDR started mailing CRD records to the firms in late January, Condon says, and NASD members have until May 31 to get their revisions back to the NASDR--before the records are uploaded to the Web site.

Under NASD rules, brokers can append their reports via a U-4 Disclosure Reporting Page (DRP). The page provides room for a brief explanation of any items on a rep's record. How changes will be made or what types of changes will be allowed during the current review process is unclear, however.

A spokesperson for Salomon Smith Barney says, "We are working on it [the clean-up of the CRD data] diligently; we have put together a task force, and once the New York [headquarters] review is done, the affected financial consultants will be given the opportunity to review the records."

A spokesperson for another major firm, who asked not to be identified, says, "We've got half a dozen people scrubbing through the records, and it will take about six weeks [to complete the review process]."

The CRD database is known to be riddled with mistakes. For example, one Florida broker who recently obtained a copy of his CRD record says the document lists a previous firm as his current employer. Another CRD report recently obtained by RR from the NASD failed to show a $25,000 arbitration a broker lost. A New York state rep who recently reviewed his CRD report claims that a description of a dismissed client complaint incorrectly described the products at issue, which were mortgage-backed bonds and bond funds, not "partnerships" and "bonds" as the CRD database says.

Is the new system any better? The record of one current EVEREN rep, called up on the new on-line service, shows a late 1995 "end date" with the firm. The system also had no record of several other reps known to be currently working in the industry. Whether the CRD data is missing on these brokers or the search criteria didn't work for some reason is unknown. Records for reps at Edward Jones, for example don't appear to be available unless a user enters the old firm name with the middle initial "D."

Registered Representative magazine previously has reported on numerous mistaken CRD entries, missing records of brokers, arbitration awards that are not reported, and amendments to brokers' records ordered by arbitration panels that had not been added to the system months and years later.

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