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  4.  | What is FINRA?

According to their website, FINRA, an acronym for Financial Industry Regulatory Authority, believes that “a vibrant market is at its best when it works for everyone” while providing “confidence to participate by safeguarding market integrity.”

FINRA’s purpose

FINRA provides oversight for the brokerage industry. The not-for-profit offers resources for various stakeholders that include investors, firms, and policymakers. They tout their commitment to solutions in a regulatory environment that is collaborative, innovative, and fair, all the while emphasizing investor safety.

Under the supervision of the SEC, FINRA focuses on the following:

  • Drafting and enforcing rules, specifically those involving ethical activities of all registered broker-dealer firms and US-based registered brokers.
  • Monitoring firm activities to ensure compliance with rules
  • Ensuring a transparent market
  • Promoting comprehensive and current education to investors

FINRA Arbitration

When acts of fraud and other harmful practices occur, FINRA investigates brokers accused of taking advantage of their clients. Common purported targets include the elderly and disabled.

In those cases, FINRA provides an alternative to litigation and mediation. Simply put, they offer fraud victims a forum through arbitration. However, they do not have a say in the outcome. Parties involved in disputes select the arbitrators who read the pleadings, listen to arguments, and review evidence. From there, a final and binding decision is rendered, provided that the ruling is not successfully appealed in court.

While oversight is essential in the securities industry, the help of an attorney is a critical component for professionals in the finance industry needing representation when facing serious allegations.

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