FINRA Regulatory Defense Lawyers

By Spodek Law Group | May 17, 2018
Understanding FINRA and the Impact on the Securities Industry

The Financial Industry Regulatory Authority (FINRA) is charged with the responsibility of monitoring and overseeing the function of brokers and securities firms within the United States. With authority granted by Congress, FINRA accomplishes this oversight by establishing regulations that apply to different sectors of the financial industry. That includes the securities industry.

The goal of the regulation and accompanying oversight is to promote integrity and honesty with the financial community. Doing so makes it harder for those with less than honorable intentions to abuse the trust placed in them by investors. When and as FINRA identifies a possible breach of established laws and regulations, legal action is likely to ensue.

FINRA’s Structure

The body functions with the support of a Board of Governors. This Board is headed by a Chief Executive Officer proper and the Chief Executive Officer of NYSE Regulations. 11 are designated as Public Governors. There are also three governors representing small firms, one for mid-sized firms, and three for large firms. An independent dealer and a floor member governor round out the Board.

The Scope of FINRA

FINRA approaches the task of maintaining integrity in the financial industry in several ways. One has to do with monitoring activities in each of the financial markets. Anything that shows signs of being questionable practices or actions is monitored closely. If the evidence indicates fraudulent activity, steps are taken to stop the action and hold the responsible parties accountable.
Investor education is another function fulfilled by FINRA. Resources are provided for investors who are just beginning to build portfolios, those who are interested in learning more about different markets, and even seasoned investors. The idea is that more informed investors are less likely to be taken in by some type of financial scam. They will also be more adept at spotting questionable practices and reporting them if necessary.

Compliance and the enforcement of current regulations is also part of what FINRA does. Brokers agree to abide by those regulations, as well as any type of investment firm. If a firm or an independent broker fails to do so, FINRA has the authority to take action. When investors file claims, FINRA investigates those claims and imposes disciplinary measures if the findings indicate action is warranted.

While education, monitoring, and enforcing current regulations are all part of FINRA’s work, crafting new rules related to the securities industry is also an integral function. The scope of those new rules impact investors, member brokers, investment firms, and even the Securities and Exchange Commission. New rules are typically drafted when and as needed, and must be reviewed by FINRA committees to ensure they are not in conflict with other regulations. Once the FINRA committee reviews are completed, the proposed rules are submitted to the SEC for further review and possible implementation.

Arbitration is also one of the ways FINRA carries out its responsibilities. The arbitration may be between investment firms and their employees, investors and brokers, or between investors and investment firms. Arbitration does not eliminate the right of either party to file class action suits if desired.

With 20 regional offices and official headquarters in Washington, DC and New York City, FINRA seeks to prevent corruption of the investment process. Parties who are facing charges of misconduct can seek help from a FINRA regulatory defense attorney. The firm of Farar & Lewis LLP stands ready to provide that defense.

FINRA is the organization responsible for the oversight of securities firms, and broker activities. Congress has authorized FINRA to regulate various areas of the financial industry in the USA. FINRA’s goal is to decrease the chances an unscrupulous business, or individual, of taking advantage of honest investors. This is done by overseeing players in the US financial markets.

FINRA monitors financial markets, and detects fraudulent activity where it may occur. It has the technical capabilities of providing a detailed analysis of financial markets. FINRA can determine when any type of activity in financial markets is an anomaly, or associated with fraud. FINRA keeps the public safe from financial fraud, and discovers unethical practices. FINRA categorizes brokers/brokerages, who act unethically, and provides this information in their database. This helps investors know if they are working with a properly licensed and registered broker/brokerage or not.


If you’re being investigated by FINRA, it’s critical you hire a FINRA regulatory defense attorney to help defend you. Brokerages, and brokers, have all agreed to comply with FINRA’s by-laws. This covers things such as how a brokerage/broker operated, and how investment products are promoted. If you are accused of not following these standards, then you could face a disciplinary action. If an investor files a complaint about suspicious activity with FINRA, then an investigation will immediately be started. Despite your best efforts to comply with all the rules and regulations, many professionals will find themselves defending their activities in front of FINRA eventually. We have experience representing financial services clients with inquiries initiated by regulatory bodies such as the SEC, FINRA, CFTC, and other government entities. We can help represent firms and professionals respond to subpoenas, in addition to Rule 8210 requests, as well as on the record interviews.

FINRA Disciplinary Proceedings Lawyers

When a broker/firm gets a FINRA Rule 8210 letter requesting information, or indicating they are the subject of a FINRA investigation – then we encourage you to contact our firm. If you’ve received a Wells Notice, advising that the SEC / FINRA is contemplating bringing an enforcement proceeding for a violation of laws and regulation – then it might be time to speak to an attorney who can help you.

Our team of attorneys thoroughly reviews all aspects of your case, and we advise our clients on the best way to minimize their exposure to potential proceedings, and sanctions. We help our clients ensure they are getting fair treatment. We work to resolve matters as quickly as possible, before they turn into formal disciplinary hearings. When the issue can’t be handled through informal actions, our attorneys can defend you in formal disciplinary proceedings.


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