The U.S. securities regulator has launched a new service that allows investors to check the background of investment providers including their employment history, licensing information, registration history and disciplinary actions.
The SEC Action Lookup for Individuals – or SALI– provides investors with access to a lot more information than what investment providers present in their promotional brochures.
Using SEC’s SALI tool, individuals can research whether a person trying to sell them investments has a judgment or order entered against him in an enforcement action. Even more information can be gleaned from a SALI report including all the stuff the investor won’t hear from his advisor like criminal convictions, civil judgments, and arbitration awards.
The regulator’s database generates a free report detailing any enforcement actions that have been taken against a financial pro, either through the SEC or federal courts. The agency also maintains databases of enforcement orders, disciplinary actions and judgments against asset managers, portfolio managers, wealth managers and investment counselors.
SALI supplements existing SEC’s investor protection resources while its coverage is not limited to registered investment professionals.
SALI allows the public to identify investment advisors, who can go by many names, in case they have settled, defaulted, or contested an SEC enforcement action, provided that “a final judgment or order was entered against them in a federal court or an administrative proceeding,” the agency said.
Commenting on this, SEC Chairman Jay Clayton said: “Our Main Street Investors themselves are a key line of defense in detecting and preventing fraud. One of the SEC’s most important tasks is to arm our investors with the tools necessary to identify potential fraudsters. An important risk factor is whether the person you are dealing with has a disciplinary history with the SEC or other regulators. SALI provides Main Street investors with an additional tool they can use to protect themselves from being victims of fraud and other misconduct.”
