Summary

THE HOUSE ENERGY AND COMMERCE SUBCOMMITTEE HOLDS AN OVERSIGHT HEARING ON THE SALES PRACTICE ABUSES AND ROUGE BROKERS IN THE SECURITIES INDUSTRY

Source CONUS Archive
Record ID 244201
Story Slug HOUSE HEARING / ROGUE BROKERS (1994)
Location WASHINGTON, DC
Format TVD
Date 09/14/1994
Archive Time 7:20
TRT 2:53
Supers 1 REP ALEX McMILLAN, R-NC 2 SEC CHAIRMAN ARTHUR LEVITT
Video Description IMAGERY AND SOUND FROM HEARING
Description THE HOUSE ENERGY AND COMMERCE SUBCOMMITTEE HOLDS AN OVERSIGHT HEARING ON THE SALES PRACTICE ABUSES AND ROUGE BROKERS IN THE SECURITIES INDUSTRY
Script (SUGGESTED TRANSCRIPT OF AUDIO) brokers could make only one job change firm change before they were forced to leave the industry I don't mean to imply that the SEC did not uncover problems, there is undoubtedly a need to beef up regular SEC examinations as well as internal compliance systems At some particular firms As the GAO will recommend today, there needs to be more effective reporting of disciplinary actions in the industry run central registration depository and a strengthening of existing disciplinary standards I would only caution that this committee not overreact to this problem by imposing penalties without adequate due process for those brokers who might have been disciplined for non fraud related matters requiring that customer complaint information be made available to the public, as the GAO suggests strikes me as a dangerous overreaction to the problem that might produce unintended results hope to be able to return after Unknown Speaker 1:22 Oh, I come out of the securities industry I was a broker I was a supervisor I know the pressures I have benefited from the rewards I'm extremely proud of the profession and the industry I'm also realistic about their problems Individual investors are seeking security and growth in the financial markets today stration depository when completed in 1996 The CRD will enable regulators to search hundreds of 1000s of records to identify problem brokers and target firms for examination We've also asked the SROs to make investors more aware of the NASD is toll free number for inquiries into a broker's disciplinary history and fourth supervision Firms really need to take a harder look at a broker's disciplinary record before hiring We're asking them to include their legal and compliance departments in decisions regarding the hiring of salespeople with a history of sales practice problems And if a broker is hired against the recommendations of those departments, we want someone up the chain of command to put the decision in writing We've also put firms on notice that if they do take the risk of hiring a broker with a bad record, they must be particularly vigilant in their supervision The whole chain of command ought to be on red alert
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