Your Options when Problems Arise: FINRA Complaint v. FINRA Arbitration
When problems arise between investors and their brokers, figuring out what
to do can be daunting. Even a simple search online can lead you in several
different directions, and the difference in options is not always clear.
The primary regulatory organization overseeing brokers and brokerage firms
is the Financial Industry Regulatory Authority (FINRA). FINRA has a resource
online called an “investor complaint program,” which can be
confusing when you discover what that program does. It is essentially
is an information collecting forum. A complaint can be made through FINRA’s
investor complaint center by completing the online form located on FINRA’s
website. With that information, FINRA investigates and can take disciplinary
action against brokers and their firms. Sanctions might include fines,
suspensions, or a ban from the securities industry.
While FINRA may investigate your claim and could potentially sanction the
broker or firm, FINRA will not recover your financial losses. This is
a very important point to understand: If you choose to file a complaint
through FINRA’s investor complaint program, it will not result in
the return of your investment losses. In the investor complaint program
brochure published by FINRA, it specifically refers investors to their
arbitration forum if their goal is to recover money for misconduct.
The arbitration forum is completely separate from FINRA’s investor
complaint program. Here is the best way to look at it: An investor’s
complaint through FINRA’s online complaint program can result in
regulatory actions against the broker or the brokerage firm but it will
not result in the recovery of your losses caused by your broker’s
misconduct. In almost every case, the only option to recover money that
was lost as the result of broker fraud or misconduct is through FINRA's
mandatory arbitration process.
If you are interested in recovering damages that resulted from broker misconduct,
your best course of action is to consult an experienced FINRA arbitration
attorney to discuss your legal rights. You can learn more about the FINRA
arbitration process by exploring our website, watch more of our informational
videos, and you’re welcome to
contact us for more information or for a free case evaluation.