NASD Weighs Broker Privacy in Web Site Plan

Treading a delicate line between investors’ needs and brokers’ privacy, the National Assn. of Securities Dealers is considering limits to information it will provide on the Internet about brokers’ backgrounds.

The group might exclude, for example, past convictions for felonies, such as murder and assault, that are unrelated to the brokers’ work.

Nancy Condon, spokeswoman for the regulatory arm of the dealers’ group, said Thursday that the NASD plans to seek public comment on the idea.

The self-policing group currently provides information to investors who request it about brokers’ disciplinary and legal histories, including felony convictions. The records are scheduled to go on a new Internet Web site this year, and some brokers and brokerage firms fear privacy rights of brokers might be violated.

“The issue has been raised to us,” Condon said. “There is a range of opinions that exist on both sides of the issue. We are not necessarily heading in one direction or the other.”

Proponents of limiting information maintain that brokers’ past legal problems unrelated to investment, fraud or theft are irrelevant to investors and should not be made public in the much wider arena of the Internet. Investor advocates argue that all available information should be made public.

Theodore Eppenstein, who represents defrauded investors in his legal practice, sees it differently.

“From the public’s viewpoint, you want to have as much information available as possible,” he said.