The Guide to Financial Background Investigations

For employers, conducting a financial background screening is an extensive undertaking that requires tapping into numerous specialized resources.

The due diligence involved in properly vetting fiscal history and identifying any potential red flags is extremely time-intensive if done in-house.

Employers have a vast range of options when it comes to financial screening, and are wise to look through options before deciding.

The Watchdogs

Government regulatory bodies act as watchdogs overseeing financial institutions and publicly-traded companies.

Searching their databases allows investigators to identify any past enforcement actions, violations, or issues involving the subject entity.

Examples of Watchdogs include:

• SEC EDGAR: Searches a company’s disclosure filings for security violations, bankruptcies, and regulatory issues.

• FDIC: Finds failed bank and enforcement actions against institutions.

• Federal Reserve Enforcement Actions: Locates penalties/fines against banks for non-compliance.

Professional Credentials

For individuals working in financial service roles, checking professional credentials and disciplinary histories is key. These following resources allow for verification of licenses/registrations and any respective violations:

• Investment Adviser Public Disclosure (IAPD): Confirm an individual’s registration as an investment adviser and reviews their employment and disciplinary records.

• FINRA (Financial Industry Regulatory Authority) BrokerCheck: Searches a stockbroker’s background including licenses, registrations, employment history, and any disciplinary actions or bankruptcies.

• NASD (National Association of Securities Dealers) Disciplinary Actions: Searches for disciplinary cases and sanctions against stockbrokers.

Leaving No Stone Unturned

Conducting financial background checks requires investigators to leverage an array of resources across government, industry, and professional domains.

Utilizing watchdog databases, as well as disciplinary histories, is crucial for uncovering any concerning red flags in an individual’s or organization’s fiscal background.

However, financial screening is just one part of a complete background investigation.

These financial inquiries should be combined with other critical checks for a holistic view of potential risks or issues. Contact us today to start verifying your applicant’s financial background!