(Dow Jones) Plans to make more broker background information available to the public means more opportunity for errors to sneak in. Regulators have a plan to deal with that, but it won't go as far as brokers might like.

The Securities and Exchange Commission recently approved a rule change that will allow records for brokers who leave the industry to stay on the Financial Industry Regulatory Authority's BrokerCheck system for 10 years, instead of the current two years. Investors can use the online service to review brokers' professional and disciplinary histories, so more information is a boon to them.

But it makes the consequences of inaccuracies more damaging, especially since details such as criminal convictions, some civil judgements and arbitration awards would be permanently available.

Anticipating the issue, the rule change includes a formal procedure for challenging errors. It mirrors an informal procedure already being used, says Jay Cummings, Finra's executive vice president for Central Registration Depository and public disclosure.

"It's conceivable that something was accurate when an individual left the industry, but it since could have been updated. Something may have changed," Cummings says.

Brokers will be able to submit a written dispute notice and supporting documents to Finra using an online form. Finra will then add a notation to the broker's report, saying the disclosure is under dispute. If the regulator determines an entry is inaccurate, it will modify or eliminate it.

"A process by which a broker can challenge an entry without going through an entire Finra arbitration process is long overdue," says Montgomery Griffin, a securities arbitration lawyer in Newport Beach, Calif.

He favors the BrokerCheck expansion, but says it isn't yet entirely clear what brokers can and can't challenge.

It may in fact be a more limited option than some brokers want. According to Cummings, Finra's investigations of errors will focus on questions of fact, such as a disclosure that belongs on the record of another broker with the same name, or a criminal proceeding that was pending when a broker left the industry but was later dismissed.

Finra won't, however, accept challenges that "are subjective in nature," he says. "We're not coming back to say that a customer's allegations are wrong."

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