What is FINRA?
Experienced attorneys explain the Financial Industry Regulatory Authority
The Financial Industry Regulatory Authority (FINRA) is an independent agency that regulates more than 4,500 brokerage firms, 163,000 branch offices, and 630,000 registered securities agents throughout the United States. Formerly known as the National Association of Securities Dealers (NASD), FINRA licenses and registers brokers and firms that sell securities to members of the public. It has a comprehensive oversight program designed to protect investors and set the boundaries of proper behavior for brokers in the United States and in U.S. securities markets.
FINRA, however, is not the same as the Securities and Exchange Commission. The goal of the SEC is to “maintain the integrity of the securities markets,” to enforce federal securities laws, and to ensure that individual investors are treated with fairness. FINRA, on the other hand, is tasked with overseeing the actions of brokers and brokerage firms. While both organizations regulate the financial markets, they do so in different ways.
The goal of the securities arbitration lawyers at The Frankowski Firm is to explain to investors their rights and seek civil enforcement of those rights before a FINRA arbitration panel. As part of the advocacy our clients have come to expect, we explain the duties that investment companies and brokers owe to their clients: to properly advise investors, to make sure investments are suitable for the investor given the investor’s investment objectives and risk tolerance, and to disclose the benefits and risks of any investment recommendation.
What does FINRA do?
FINRA has 20 regional offices in the United States, including Washington, DC and New York. Some of the core services FINRA provides are:
- Member regulation. Firms and brokers must comply with FINRA’s rules and the rules of the Securities Exchange Commission before they can be licensed and be approved for FINRA registration. Each firm is examined at least once every four years after the initial registration.
- Education and information. FINRA works to provide investors and participants the trade information needed to properly assess the value of securities, including timely quotes and trade data for debt and equity securities.
- Enforcement. The FINRA enforcement department investigates violations of its rules and other securities rules and brings disciplinary actions against wrongdoers when warranted. FINRA has the authority to impose fines and to bar or suspend brokers and firms that are in noncompliance.
- Market regulation. The FINRA market regulation department monitors close to 100% of the equities market and 70% of the options market.
- Office of Fraud Detection and Market Intelligence (OFDMI). OFDMI is the main point of contact for securities fraud related issues. The department has surveillance programs that inspect insider trading fraud and regularly reviews the complaints of investors, regulatory filings, and tips it receives.
- Adjudication and decisions. FINRA has a hearing process to determine if rules violations have occurred, and if disciplinary action should be taken.
Virtually all investment disputes are heard by an arbitration panel. FINRA manages most of these panels nationwide and trains the arbitrators that sit on the panels. Most investors are required to participate in securities arbitration because firms usually include arbitration provisions in all of their client contracts. Our FINRA arbitration attorneys file claims on behalf of investors who believe their investments have been improperly handled.
Call our knowledgeable attorneys for FINRA securities advice today
If you have lost money as a result of your broker’s wrongful conduct or if you think your savings are not being properly managed, contact us today. It is important that your lawyer have experience with FINRA arbitration. FINRA claims are not the same as claims filed in court. Claim drafting, claim filing, discovery, and timelines are all different from civil litigation in courts of law. To ensure that you are getting the best representation possible, contact an attorney that focuses their practice on FINRA arbitration. To speak with one our lawyers, call us at 888-741-7503 or complete our contact form.