Prerequisite: Before you complain to regulators
|Country:||United States of America|
|Country Common Nicknames:||United States, USA, US|
|Big Bad Regulator, Long Name:||The Financial Industry Regulatory Authority|
|BBR, Short name:||FINRA|
|Type:||Self-Regulatory Organization, SEC approved|
|Main website homepage:|
|Regulatory licenses issued:||
[Yes, database listing of all stock broker dealers, along with industry professionals required to obtain training]
|Complaints:||yes, main complaint portal|
|Do they do alerts?||Yes, usually several times a month | Twitter|
|Do they ever eject a registered company?||Yes|
|Do they ever fine a registered company?||Yes. Monthly disciplinary reports show regular 6+ figure fines and/or compensation amounts.|
|Do they ever directly or indirectly file criminal charges?||No. But they may refer cases to SEC for either fine orders or civil complaints|
|Do they ever mandate repayments to clients?||Yes!|
|Contact info||see below [keep reading until end]|
FINRA is the self-regulatory organization (SRO) that is authorized by SEC to supervise the conduct of securities broker-dealers and crowd funding portals. Basically FINRA is to the SEC what the NFA is to the CTFC. So FINRA has a dual role of supervising brokers and developing best practices for the securities industry. Lets briefly highlight what they do:
- Write and enforce rules policing the ethical activities of all registered stock broker/broker-dealers brokers in the U.S. and US Territories;
- Supervise firms for compliance with those rules;
- Promote market transparency; and
- Impart knowledge to investors.
In more pragmatic terms, FINRA Regulate over 600k securities brokerages in USA and US Territories. They accomplish this by using machine learning and other AI surveillance to analyze billions of daily transactions which I estimate represent a outstanding notional value of over $100 Trillion. The also accept and investigate complaints from investors. They also require that certain employees within each brokerage firm take qualifying examinations and submit to additional continuing education.
Consider this summary of actions for FINRA in 2020: They brought over 800 disciplinary actions against registered brokers and firms for unethical behavior. They also levied over $50.0 million in fines and ordered over $25 million in restitution to harmed investors. And whatever was outside of their scope, they referred more than 970 fraud and insider trading cases to the SEC and other agencies for litigation and/or prosecution.
The securities industry is pretty heavily regulated. Note that this does not mean that scams do not exist. Bernie Madoff should come to mind if anyone thinks they can escape the bs of the fx community. I would argue border-line micromanaged: FINRA also review all broker advertisements, websites, sales brochures and other communications to make sure brokers present information in a fair and balanced manner. Every year, FINRA reviews about 100,000 individual advertisements and communications from firms to investors. CTFC has similar edicts where brokers are required to submit their main advertising brochures to NFA prior to publication. And it must contain certain specific disclaimers.
And it seems like at least every other week a firm is getting fined or sued by either FINMA, SEC, or both. We mentioned earlier about FINRA issued over $75 million in combined fines and restitution orders. Well their bigger brother, the SEC obtained judgements approaching $4 billion of combined disgorgement and penalties And over 1/3 of the penalties seemed to be given to whistleblowers. Imagine if something similar occurred with being able to get restitution for exposing fx firms. I should be a billionaire at this point.
Finra Investor Education Foundation which serves as the educational non-profit portion who’s stated goal is to “empower underserved Americans with the knowledge, skills and tools to make sound financial decisions throughout life.” Or in other words, they help poor and those without formal education to better understand how “complex” bullsh** contracts like securities and crowdfunding works for them and the larger society. Make of that what you will; I do think it is worth a look.
|Additional contacts||Read below|
|Washington D.C. [Main headquarters]||FINRA
1735 K Street, NW
Washington, DC 20006
|Senior Citizen dedicated hotline||844-57-HELPS (844-574-3577)
Monday – Friday
9 a.m. – 5 p.m. Eastern Time [website]
|FINRA law authority||SEC Press release 2007-151 | SEC Commissioner’s order 34-56145 authorizing NASD + NYSE sro merger into FINRA|
|Research companies||BrokerCheck [hotline: (800) 289-9999] | FINRA disciplinary actions | Individuals Barred by FINRA | SEC Action Lookup Individual (SALI) | Public Alert: Unregistered Soliciting Entities (PAUSE) | State Securities Regulator (NASAA)|
|Complaint against broker||Complaints homepage | General Tips (no whistleblowing) | Formal Complaint | Arbitration | Mediation | Securities Investor Protection Corporation (SIPC)|
|Investor resources||Tools / Calculators | Types of Investments | Arbitration Awards history | ConEmIfYouCan | FINRA Foundation ||
|Key pamphlets||FINRA Investor Complaint Brochure [local copy] | Fighting Fraud 101 [local copy] ||