FINRA Executive Vice President Richard W. Berry highlighted steps the organization is taking to address unpaid awards.
Following critical statements by SEC Chair Jay Clayton and SEC Commissioner Kara M. Stein as to the difficulties that investors have in collecting arbitration awards, Mr. Berry said that FINRA's primary role with regard to arbitration is to administer cases. He acknowledged that roughly a third of the awards go unpaid. According to Mr. Berry, FINRA is taking a variety of steps to confront unpaid awards, including:
- implementing regulatory measures to pinpoint and remove bad actors from the broker-dealer industry through enforcement actions, examinations and rulemaking;
- continuing to take strong action against those that do not pay awards; and
- proposing a series of rules to address unpaid awards (i.e., rules to prevent parties from dodging the payment of awards through asset transfers).
Mr. Berry stated that FINRA will continue to work in a collaborative manner to address the issue.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
