INTERNET TO OFFER SCOOP ON WALL STREET BROKERS.

Byline: Rob Wells Associated Press 

An enormous database containing the "rap sheets" of all Wall Street brokers and their firms will be posted on the Internet, the National Association of Securities Dealers Inc. said Tuesday.

On-line access to key parts of the records will arm everyday investors with a quick and powerful tool to protect themselves against sleazy stock brokers.

Mary Schapiro, head of the NASD's new regulatory arm, said the specifics of the Internet proposal haven't been worked out, but the association plans to electronically post the information it currently provides on its toll-free 800 telephone service.

"If they can get the information by calling up on a toll-free hot line, they ought to get the same information over the Internet," Schapiro said in an interview. "We ought to make information as easily accessible to customers and investors as possible."

Schapiro said the information drawn from the Central Registration Depository, a broker licensing computer system, could be on the Internet as early as 1997, but no specific schedule has been determined.

Consumer groups and other regulators strongly welcomed Schapiro's announcement, which they called a strong pro-investor step for the NASD, an industry self-regulatory agency.

"Anything that improves public access to disciplinary history is a step in the right direction for investors," said Barbara Roper, securities specialist for Consumer Federation of America. "It creates a stronger incentive for brokers to maintain a clean record."

Securities and Exchange Commission officials also applauded the idea, saying it would make it much more convenient for investors to get the information through the World Wide Web, the easy-to-use portion of the Internet.

"I think it will help increase the general confidence in the whole industry," said Michael Schlein, the SEC's chief of staff.

The Central Registration Depository contains detailed information on the industry's 505,000 brokers, including employment and educational history, customer complaints, fines and settlements from arbitrations or court actions. Similar records are kept for some 5,000 brokerage firms.

Wall Street firms have complained that the CRD system is a "toxic waste dump" because it contains many outdated records and customer complaints that were never pursued. The firms and brokers have feared their due process rights would be violated if their raw files were publicly released. The records, which date back to 1981, can be hard to interpret.

To allay those concerns, the NASD's releases an edited version of brokers' and firms' CRD records on an 800 telephone service. Items disclosed include censures, fines, and suspensions, but pending customer complaints, pending arbitration cases and disciplinary actions against brokers by their firm aren't released.

This edited version of the CRD records is what Schapiro proposed to put up on the Internet.

It's possible that information could be expanded even further in the future, since the NASD and state securities regulators have reached a tentative agreement to improve CRD record disclosure.