With the public's distrust of the financial community in overdrive, FINRA hopes to make disciplinary records permanently available on its BrokerCheck site.

FINRA is proposing a major expansion of its BrokerCheck service to make broker records and disciplinary details permanently available to the public, even if a broker leaves the industry.

The current FINRA Rule 8312 say that once a broker leaves his job or is stripped of his license, data about him must be purged after two years. But that individual can still hang up his shingle in another financial capacity-without the general public being the wiser.

To be sure, a broker's record can still be gleaned by scouring through monthly disciplinary records and other sources; a fairly time-intensive activity that few investors know how to do. The enhanced BrokerCheck service will be a simpler approach.

According to FINRA's proposal, the rule change would allow the public access to information about formerly registered persons "if they were the subject of any final regulatory action" such as "any final action by the Securities and Exchange Commission, the Commodity Futures Trading Commission, a federal banking agency, the National Credit Union Administration," another federal or state regulatory agency or a self-regulatory group.

Calling the rule change a "measured expansion of BrokerCheck," FINRA hopes to not just restore public trust in its industry, but also prevent former financial wrongdoers from causing harm in the future. "One of the [ways] we can make a difference is to put out there the people who are subject to a final regulatory action-so there's a known place to go," says Jay Cummings, FINRA's executive vice president.

FINRA petitioned the SEC in April to be allowed to remove the time limit on a broker's details that remain on the site.

The SEC is expected to publish the proposal, solicit comments, and then allow FINRA to respond, taking at least a month, says Cummings. Calls to the SEC for further clarification were not returned.

But in light of public outrage, it seems unlikely that FINRA will be refused. In fact, Cummings notes that investors ran 11.6 million reviews of a broker or firm's record on BrokerCheck in 2008. This year "we're on track to beat that by a large margin," he says.

As one example, federal authorities recently charged Nicholas Cosmo with defrauding investors of nearly $400 million through a so-called pyramid scheme-a full 10 years after he had been banned by the securities industry for theft of customer funds and sentenced to the Allenwood, Pa. federal penitentiary. He was released in August 2000.

FINRA's member firms are taking the possible rule change seriously. "We're examining the proposal, looking carefully at its implications for our industry, our financial advisors and our clients," says Tony Mattera, spokesperson for Wells Fargo Advisors. Other members did not offer any comment.

But Cummings says that FINRA's board of governors is fully behind the proposal. "When we brought this before them, they immediately received it positively," he says. "You only have to read the paper to see the obvious need."