(Dow Jones) A Financial Industry Regulatory Authority proposal to significantly expand public information about brokers will fill gaps that remained after earlier changes, say investor advocates.

Finra announced Wednesday that it will submit a proposal to the U.S. Securities and Exchange Commission that would allow records for brokers who leave the industry to be publicly available through its online BrokerCheck system for ten years instead of the current two-year period. Information, such as criminal convictions and certain civil and arbitration judgments, would become permanently available under the proposal.

"We're very pleased," says Scott Shewan, president of the Public Investors Arbitration Bar Association, or Piaba, a Norman, Okla.-based group of lawyers who represent investors in securities arbitration.

The proposal, if approved, would expand upon other modifications to the BrokerCheck system that the SEC approved in November. Those changes allowed Finra to make records of brokers' final regulatory actions, such as bars, suspensions and fines, permanently available. Disclosure records for all former brokers with sanctions imposed by Finra, the SEC, Commodity Futures Trading Commission and other regulators became available on November 30.

Finra's latest proposal, however, addresses some concerns posed by investor advocates in comment letters responding to previous expansion. Many investor advocates supported the changes approved by the SEC, but called for increasing the time period for which information would be publicly available. Piaba, for example, suggested lengthening the period to at least six years. William Jacobson, director of the securities law clinic at Cornell University, wrote at the time that the records should be online "indefinitely."

The latest proposal, however, is a good compromise, he says. "Ten years seems like a reasonable period of time," he says.

Finra's proposal, which it hasn't yet submitted to the SEC, also addresses concerns raised last year about the scope of information that would be available to investors. Some lawyers argued that limiting the disclosure to final regulatory actions was meaningless because few brokers reach that stage, even though they may have racked up customer complaints or engaged in questionable behavior.

The proposed BrokerCheck expansion announced Wednesday would increase the number of customer complaints that are publicly reported. All "historic" complaints against a broker dating back to 1999, when electronic filing of broker information was initiated, would be made available.

Those complaints generally include customer complaints and certain legal actions that are more than two years old and which haven't been concluded or settled for less than $15,000. They are presently reported on BrokerCheck, but only when the broker has been involved in three or more regulatory actions or events that require disclosure. The information would be disclosed, regardless of the number of regulatory actions or events in which a broker is involved.

One potential downside, however, is that customer complaints don't necessarily mean a broker has engaged in wrongdoing. But those complaints could have a lasting effect on brokers, says Chuck Dalziel, a lawyer in Marietta, Ga.

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