The board of the Financial Industry Regulatory Authority (FINRA) recently
moved to increase disclosures from firms and brokers that fail to pay
arbitration awards and to strengthen the sanctions they place on brokers
with disciplinary histories and the firms that hired them.
These proposals will allow for the restriction of firm and broker activity
while cases are on appeal, allow for increased penalties against brokers
with certain infractions, and require firms to increase their supervision
when a broker appeals a hearing decision or while a disqualification request
is under review.
A separate proposal will require firms to publically disclose whether or
not conversations between customers and their brokers need to be recorded
because a significant percentage of their brokers previously worked at
disciplined firms. The challenge of dealing with brokers who are repeatedly
disciplined has been a longstanding issue for the regulatory body, but
FINRA hopes these changes can help them push back.
"These actions will build on FINRA’s extensive existing programs
to address high-risk brokers and reflect our commitment to protect investors
and promote public confidence in securities firms and markets," FINRA
president and chief executive Robert Cook said in a statement.
FINRA also proposed that customers have the ability to withdraw their arbitration
case when a broker or firm becomes inactive while their case is pending
and refile it in court.
At Meyer Wilson, our securities fraud attorneys are committed to fighting
for the rights of fraud victims across the United States. If you lost
money investing with a broker, call us today to discuss your case with
a member of our firm, or
fill out our online form to request a free consultation.