Next week, FINRA will take a look at two problems that have been plaguing it: brokers with disciplinary records who manage to keep popping back up in the industry and firms that do not pay arbitration awards. The regulator will “consider proposed rule amendments and other steps designed to heighten the oversight of high-risk brokers and the firms that employ them,” according to its agenda for its meeting on May 10 in New York.
Dealing with repeatedly problematic brokers has been an issue for FINRA for years. At the beginning of the year, FINRA stated that monitoring these brokers was its top priority in ts annual regulatory and examination priorities letter and created a team to monitor these rogue brokers.
FINRA will additionally consider changing its arbitration procedures and Form U4 regarding payment of arbitration awards by firm and brokers. The Public Investors Arbitration Bar Association issued a study last year showing that $62 million in arbitration awards were not paid to investors in 2013, roughly a quarter of the total amount owed to investors for damages that year.
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