How can I find out if an online brokerage firm is legitimate? By Kimberly Lankford, Contributing Editor March 27, 2006 I've been searching for a low-cost online brokerage firm to work with, and some of the ones I've come across don't sound familiar. How can I find out if a firm is legitimate?You're smart to ask questions and investigate because tech-savvy crooks often create Web sites that look like legitimate businesses. Start with the NASD, the brokerage industry's self-regulatory body. On its Web site, you'll find a summary of a company's Central Registration Depository (CRD) report, which contains disciplinary and regulatory actions, settlements and complaints. To bring up the information, type the firm's name into the NASD's BrokerCheck. You'll be able to see where the firm is licensed, how long it's been in business and whether any disciplinary actions have been taken, as well as other information. You also can search for information about individual brokers at the site, too. For more advice, see the NASD's How to Avoid Problems With Your Broker. Also see if the brokerage is insured by the Securities Investor Protection Corp. (SIPC), which insures securities in customer accounts up to $500,000, including $100,000 for cash claims, should the brokerage fail. It does not insure against losses stemming from market declines. SIPC's main Web site also includes other helpful information and resources for avoiding problems with your broker. Also check out SIPC's warning about brokerage identity theft scams. Another option is to check out the firms we've chosen for our Which Online Broker is Best for You? tool, where you can search for brokerage firms based on a broad array of criteria, such as fees, number of funds, or overall rankings. Got a question? Ask Kim at firstname.lastname@example.org.