IDA launches disciplinary history online search feature

(October 24, 2003) The IDA has launched a new online service that allows investors to check a broker’s disciplinary history. The electronic records date back to 1997 when the brokerage industry association started posting disciplinary notices on its Web site.

“This is a quick and easy way to verify whether your investment advisor has a disciplinary history,” says Alex Popovic, the IDA’s vice-president of enforcement.

Investors can use an information request form for prior disciplinary history in paper form going as far back as 1984 and can also check a broker’s registration status. Information on a firm’s registration status is also available online.

Although the IDA’s disciplinary files have never been secret, they were not easily accessible, says Popovic. “Most of this information was already available but you would have to know who to call. There’s one point of contact now.”

The IDA has added a glossary of terms to the investor education area of the Web site.

From an enforcement perspective, Popovic says he hopes the new service will provide a level of deterrence, since registrants will know that if they do run into trouble with the IDA, “their name’s going up there for an awfully long time.”

Only a small segment of the IDA’s approximately 23,000 registered investment advisors are subject to disciplinary procedures, Popovic says, around 50 or 60 a year.

And although there’s anecdotal evidence that complaints against brokers rise as markets decline and investors lose money, Popovic says no empirical study has been done to prove that connection. In fact, the number of complaints the IDA has received has been fairly constant over the past few years.

Popovic also revealed that the IDA is making progress in its efforts to make fines against brokers and firms orders of the court. A disciplined broker who leaves the industry is currently under no legal obligation to pay an outstanding fine.

The IDA has just completed its first execution order against title in Alberta, where a fine against an individual was assessed earlier this year. After a few legal issues have been tied up, the order will be finalized, perhaps as soon as next month, Popovic says.

The association is also working on a test case in another province which Popovic hopes to wrap up in the coming weeks. The procedure must be done on a province-by-province basis, he says, since debt collection and securities regulation are under provincial statutes.

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To check out the new service, click on the IDA Web site.

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Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca