As an investment advisor I understand that my record is now available to the general public online. I know brokers have had their records available like this for some time now but what does this mean for advisors like myself who have never had to deal with something like this?

— T.H., via e-mail

The Investment Adviser Public Disclosure database, which state securities regulators launched last month, is an online system similar to FINRA's BrokerCheck database, which tracks the disciplinary records of registered representatives. You should understand that this information was always available to the general public, it's just that previously, investors seeking to obtain the records of individual advisors had to call state regulators. Investor advocates, however, have been pushing for more transparency for some time, arguing that the information is vital for investor protection.

As brokers have learned over the years, a disciplinary record that contains several negative events-even if the incidents are unproven-can hurt your ability to get hired or attract clients. Consequently, you should review your record carefully and immediately contact your state regulator if there is any incorrect information showing. The information available on the database is filed by investment advisors on Form ADV and is updated when they amend these same forms. The website contains information on investment advisors who are currently registered with the Securities and Exchange Commission or a state as well as information on investment advisors who were registered in the previous two years but are no longer registered.

I had an arbitration case filed against me that I settled. Payments were to be made over time but I ran into some financial problems and cannot afford the payments right now. I'm trying to work something out with the claimant's attorney but if I can't, could this affect my license?

— D.K., New York

FINRA Rule 9554 allows the regulatory organization to bring expedited actions to address failures to comply with its arbitration awards or settlements. Once a monetary award has been issued in a FINRA arbitration proceeding, the party has 30 days to pay the award. If the parties have entered into a settlement, those terms control the agreement.

If a respondent has not paid in accordance with the settlement agreement and FINRA is notified of the failure to pay, the regulator will initiate an expedited proceeding by sending a notice explaining that the respondent will be suspended unless he or she pays the award in compliance with the settlement agreement, or requests a hearing.

Effective July 2, 2010, firms and associated individuals are no longer able to rely on an inability-to-pay defense in these expedited actions once the Rule 9554 notice initiating the action is sent. Prior to this, a respondent who was able to establish a bona fide inability to pay could use that as a defense to the suspension.

FINRA's Rule 9554 uses the threat of a potential suspension to help ensure that a firm or an associated person promptly pays a valid arbitration award or complies with the terms of a settlement. But, if a respondent demonstrated a financial inability to pay the award the threat carried very little weight and, therefore, the claimant was much less likely to be paid.

As a result, FINRA proposed (and the SEC recently approved) the amendment to Rule 9554. There is an exception. If you have filed a petition in bankruptcy and the bankruptcy proceeding is pending, or the bankruptcy court has discharged the award or payment owed under the settlement agreement, that would constitute a valid defense.

While in the process of changing firms, several customers filed complaints against me. The state investigated and attempted to serve me with a complaint. I'd recently moved and never received the notice. The state ultimately entered a default against me and hit me with a substantial fine which I cannot afford to pay and also rejected my application for registration. Is there anything I can do at this point, especially considering that I didn't get the notice of the complaint?

— K.M., Miami

Unfortunately your options at this point are extremely limited. Notwithstanding the fact that you weren't registered at the time, it is the broker's obligation to keep his address current with CRD (see, NASD Notice to Members 97-31) so the excuse that you didn't receive the notice is unlikely to go very far (especially considering the fact that you were applying to get re-registered). You had 20 days to request a hearing from the date you were deemed to have been served with the notice and that time frame has long since passed. In addition, once the state issued its order, you had 30 days to request a judicial review of the sanctions and that time has also long since passed.