New Regulation Will Aid FINRA in Singling Out Brokerage Firms and Brokers with Bad Behavior

In an attempt to closely monitor individuals and firms with a history of misconduct, the Financial Industry Regulatory Authority (FINRA) has proposed a new regulation that hopefully would allow the agency to supervise securities firms and individuals more effectively.

What is the Regulation

FINRA has identified a large number of brokers in the securities industry who pose a high security risk to their clients. According to FINRA CEO Robert Cook, 2 percent or 61 firms will have new restrictions because of the high risk of securities fraud they pose to investors.

How it Works

By looking at their pattern of complaint and regulatory disclosures, FINRA believes it can predict illicit behaviors from problematic brokers.

What it Means

Since 2017, FINRA has focused more attention on brokers and firms with a history of bad conduct, high-risk behavior, and securities fraud. Now, there are nearly 3,600 brokerage firms and more than 600,000 brokers that FINRA monitors. The goal is that additional monitoring of individual brokers and brokerage firms who show a pattern of bad behavior will help prevent further misconduct and investor losses.

Speak with a Securities Fraud Attorney

Dimond Kaplan & Rothstein, P.A. has vast experience representing investors who have lost money as a result of securities fraud or stockbroker misconduct. We will aggressively pursue claims to recover your losses or damages.

If you are looking for a securities fraud attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of securities fraud or stockbroker misconduct.

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