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Tip of the Day

Fraud Tip of the Day - July 7

How to Investigate Your Stockbroker or Brokerage Firm

Finding out if a stockbroker or brokerage firm is trustworthy is the first step you should take before let them handle your investments.

Have wondered how to check into a stockbroker or brokerage firm to determine whether they're trustworthy enough to handle your investments? Selecting an honest broker or securities firm is an important first step for any investor about to take the plunge and begin investing funds in the market. You'll want to know whether they're licensed, experienced, been disciplined, convicted of crimes, filed for bankruptcy or paid settlements. These are important questions to find answers to before allowing someone access to your funds. Another question on the minds of many investors is, "Where do I look to find this information?" The answer to this question and many more is the Central Registration Depository System.

You can access the U.S. Securities and Exchange Commission's Central Registration Depository webpage at the following URL:

Central Registration Depository

Over 600,000 stockbrokers and over 6,000 brokerage firms are listed in the CRD's database. Information kept in the CRD includes licensing and registration for each of these firms and stockbrokers. Some states require others besides stockbrokers to be licensed, such as insurance agents who sell variable annuities or life policies, so they will show up in the CRD as well.

The more detailed stockbroker data tracked in the CRD includes:

Brokerage firm data includes:

Before investing we encourage you to visit the SEC's webpage listed above. There's a wealth of information contained therein to assist you with making an informed decision. You can't afford not to.