United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1994-09-14 monographic deposited born digital GA 1.13:T-GGD-94-190 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-94-190 P0b002ee18038c6a7 f:tgg94190 DGPO 2010-08-12 2011-03-28 GAOREPORTS-T-GGD-94-190 machine generated eng fdlp REPORT GAOREPORTS-T-GGD-94-190 T-GGD-94-190 Securities regulation Brokerage industry Employee dismissal Consumer protection Reporting requirements Information disclosure Sanctions Ethical conduct National Association of Securities Dealers Central Registration Depository Testimony GGD Unscrupulous brokers--persons licensed to sell securities who have seriously breached sales practice rules or have a history of repeated sales practice violations--can significantly harm investors financially and can erode public confidence in the securities market. Although unable to determine the exact extent to which unscrupulous brokers are operating in the securities industry, GAO obtained data showing that of almost 470,000 active brokers, about 10,000 had at least one formal disciplinary action taken against them for a variety of violations, including sales practice abuse; 816 had three or more disciplinary actions. Precise information on unscrupulous brokers is unavailable because abusive sales practices are often difficult to detect and the Central Registration Depository--a data base maintained by state regulators and the National Association of Securities Dealers--does not describe informal disciplinary actions taken against brokers and does not provide summary data by type of violation for the disciplinary histories it maintains. Available evidence points to shortcomings in the detection and discipline of unscrupulous brokers. Furthermore, GAO found that some practices contribute to a perception that Securities and Exchange Commission and industry disciplinary actions are lenient. For example, brokers who were permanently barred have been able to reenter the industry. Also, brokers barred from the securities industry are free to work in other financial sectors, such as the banking and insurance industries. https://www.govinfo.gov/content/pkg/GAOREPORTS-T-GGD-94-190/html/GAOREPORTS-T-GGD-94-190.htm GAO/T-GGD-94-190 https://www.govinfo.gov/app/details/GAOREPORTS-T-GGD-94-190 Testimony GAO/T-GGD-94-190; Securities Markets: Actions Needed to Better Protect Investors Against Unscrupulous Brokers; Securities regulation Brokerage industry Employee dismissal Consumer protection Reporting requirements Information disclosure Sanctions Ethical conduct National Association of Securities Dealers Central Registration Depository