A leading U.S. regulator has recently proposed the establishment of a federal registry. This initiative aims to simplify the process for investors and law enforcement agencies to access information on previous financial fraud convictions and civil penalties.
Christy Goldsmith Romero, a commissioner of the Commodity Futures Trading Commission (CFTC), voiced her support for the creation of a centralized, searchable database of financial misconduct during a conference. This would enable the public to better protect themselves from fraudulent actors.
Romero emphasized the importance of such a comprehensive record, stating that it would allow the public to verify a person or entity before entrusting them with their money, confidence, and business. Although some regulatory bodies maintain databases of disciplinary actions or consumer grievances, no national database currently exists that facilitates searches across federal and state agencies.
The creation of a centralized registry would not only streamline the search process but would also assist the government in pinpointing repeat offenders. This, in turn, would act as a deterrent for potential fraudsters. Romero had previously proposed the idea of such a registry during her tenure as the overseer of a pivotal 2009 financial crisis bailout program. She joined the CFTC in March 2022 as one of its five commissioners.
Romero highlighted the pressing need for such a database in the context of the cryptocurrency sector. She noted the rampant fraud in the crypto domain and the challenges individuals face due to scattered information. In her prior role, Romero had initiated a database for financial crimes related to the Troubled Asset Relief Program. This database could potentially serve as a blueprint for a more expansive national registry, which could be organized by federal regulators and also involve state regulators.
However, Romero acknowledged the challenges associated with this endeavor. Identifying a single agency to manage the database and securing the necessary initial funds for its launch would be significant hurdles.