SEC Unveils New Tool to Check Background of Individual Investment Providers

The tool provides investors with ‎access ‎to a lot more information that investment providers ‎present ‎in their brochures.‎

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.‎

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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.‎

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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.”‎

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