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.