Background Checks

When investors begin their homework on small-cap companies – particularly on penny stocks – they should probably start with an important history lesson. Specifically, they should conduct background checks on their stockbrokers and the companies those brokers are touting.

 

The Street Sweeper has designed a cheat sheet of sorts to help out with this research. Our “Rap Sheet” section links to a free tool (sponsored by FINRA) that allows ordinary investors to review the backgrounds of individual stockbrokers and their brokerage firms. The section also links to whistleblower cases and class-action lawsuits targeting publicly traded companies. It provides access to recent news of SEC enforcement actions and FBI white-collar crime investigations as well.
 
Together, these tools should help investors determine whether their brokers – and the stocks that they are selling – actually pass the “smell test.”

Broker background checks:
http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/index.htm

Whistleblower cases:
http://www.taf.org 

Class-action lawsuits:
http://www.classadvocate.com 

SEC Enforcement Actions/Litigation Releases
http://www.sec.gov/litigation/litreleases.shtml 

FBI White-Collar Crime Investigations:
http://www.fbi.gov/whitecollarcrime.htm
http://www.fbi.gov/page2/page2index/wcc.htm