A client of mine had purchased auction-rate securities at another firm before transferring his account to me at my firm. I didn't sell the auction rates to him but he seems to be blaming me for the fact that the ARS are now illiquid and he can't get the money out. What can I tell him?

— A.P., Florida

Many state regulators have filed regulatory complaints against firms that sold auction- rate securities for misrepresenting them as cash alternatives. In virtually all of these actions, the firms have entered into settlement agreements with the states to buy back the illiquid investments from their clients. A few other firms have established voluntary buy-back procedures.

However, in some cases where the customers no longer maintain an account with the firm that sold them the ARS, the firm is unwilling to repurchase the investments. In your client's situation, it seems fairly clear that it is not your fault that the investment is illiquid, nor that the client's previous brokerage firm is unwilling to repurchase the auction rates.

It would seem that your client's only alternative would be to file an arbitration claim against his prior brokerage firm to try and get an award from an arbitration panel ordering the other firm to buy back the auction-rate securities.

Several years ago I gave up my series 7 to become a registered investment advisor. How long does FINRA continue to provide information on me through the BrokerCheck public disclosure system?

— A.T, via e-mail

FINRA Rule 8312 governs the information FINRA releases to the public via BrokerCheck. FINRA established BrokerCheck in 1988 to provide the public with information on the professional background, business practices and conduct of FINRA member firms and associated individuals.

As stated in FINRA Regulatory Notice 09-66, as of Nov. 30, 2009, FINRA has expanded BrokerCheck to provide public access to certain information about former associated individuals, regardless of when they were associated with a firm, if they were the subject of any final regulatory action as defined in Form U4.

A final regulatory action as defined in Form U4 may consist of any final action, including any action that is on appeal by the Securities and Exchange Commission, Commodity Futures Trading Commission, a federal banking agency, the National Credit Union Administration, another federal regulatory agency, a state regulatory agency, a foreign financial regulatory authority or a self-regulatory organization.

The amendments to Rule 8312 will allow public access to information about formerly registered people, who, although no longer in the securities industry in a registered capacity, may work in other investment-related industries or attain other positions of trust and about whom investors may wish to learn relevant disciplinary information.

Specifically, FINRA will disclose information through BrokerCheck concerning any final regulatory actions, as well as certain administrative information (for example, employment and registration history) and information about qualification examinations, if available, regarding these formerly registered individuals. FINRA also will provide the most recently submitted comment, if any, provided by the subject person.

Alan J. Foxman, ESQ., is an attorney with Fred Chikovsky & Assoc. in Boca Raton, Fla. His comments are not intended to be legal advice.