WHAT IS FINRA?

Posted On: October 23, 2010 by Law Offices of Ralph Behr

What is NASD? It is now FINRA. It's mandate is to regulate most contact and transactions between securities industry "regulated individuals" and consumers. The securities industry is largely regulated by this non-governmental agency which exists to produce guidelines and standards and to enforce securities laws regulating ‘regulated individuals’… People who work as stockbrokers and financial advisors. It's most important function, for you and I, is that it is the place we can go to resolve a dispute with a regulated person: a stockbroker, a financial advisor, a wire house, a financial professional who is in the business of providing financial services and selling financial products to individuals and non individual clients (trusts, companies, corporations, charitable institutions, legal entities that basically don’t breath or eat): Think stockbroker. If you have a complaint about your stockbroker you go to FINRA. They provide you with a forum in which to resolve claims: arbitration. Arbitration is held at their offices, before a panel of three arbitrators. The process of arbitration for dispute resolution is generally regarded as better than the courtroom and all the formal court proceedings and procedures which make dispute resolution so complex. The process of arbitration works well for those who are prepared and organized and on the right side of the issue. Not every loss is compensable and not every loss is incurred by malfeasance or misfeasance (bad acts). But those that are, that is losses that are the result of some improper act by a “regulated” person can be brought to arbitration. Arbitration is not mediation. Mediation is happy talk and a suggested solution. Arbitration is different. In arbitration the decision is enforceable and final and therefore resolves conflicts.