Solutions For RealSolutions For Real
  • Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans

Subscribe to Updates

Get the latest finance news and updates directly to your inbox.

Top News

When It Comes To Medicare Cards, What’s In Your Wallet?

July 17, 2025

Here’s How Much Medicare Costs Could Increase in Just 10 Years (and How to Plan)

July 17, 2025

20 Part-Time Jobs With Excellent Pay and Flexibility

July 17, 2025
Facebook Twitter Instagram
Trending
  • When It Comes To Medicare Cards, What’s In Your Wallet?
  • Here’s How Much Medicare Costs Could Increase in Just 10 Years (and How to Plan)
  • 20 Part-Time Jobs With Excellent Pay and Flexibility
  • JPMorgan Worth More Than Citi, Bank of America, Wells Fargo
  • How An Economist Thinks About “Trump Accounts”
  • Judge’s Rule Reversal Means Medical Debt Could Impact Your Credit Report
  • What the New Tax Law Changes for Slot Machine Players
  • 9 Long-Held Traditions That Are Quietly Wrecking Family Finances
Thursday, July 17
Facebook Twitter Instagram
Solutions For RealSolutions For Real
Subscribe For Alerts
  • Home
  • News
  • Personal Finance
    • Savings
    • Banking
    • Mortgage
    • Retirement
    • Taxes
    • Wealth
  • Make Money
  • Budgeting
  • Burrow
  • Investing
  • Credit Cards
  • Loans
Solutions For RealSolutions For Real
Home » What Is FINRA?
Investing

What Is FINRA?

News RoomBy News RoomAugust 6, 20230 Views0
Facebook Twitter Pinterest LinkedIn WhatsApp Reddit Email Tumblr Telegram

The Financial Industry Regulatory Authority (FINRA) is the largest nongovernmental organization that writes and enforces rules governing the ethical activities of all broker-dealer firms and registered brokers in the U.S.

FINRA oversees more than 624,000 registered brokers across the country and it analyzes billions of daily market events.

Learn how FINRA began and how it operates today to ensure registered brokers comply with ethical rules.

Key Takeaways

  • The Financial Industry Regulatory Authority (FINRA) is a nongovernmental organization that writes and enforces rules on the ethical activities of all broker-dealer firms and registered brokers in the U.S.
  • FINRA oversees more than 624,000 registered brokers across the U.S. It also administers qualifying exams that brokers must pass to sell securities.
  • Investors who feel they are a victim of fraudulent activity by a broker-dealer can seek resolution and damages through mediation or arbitration overseen by a FINRA official.

Definition and Example of FINRA

FINRA—the Financial Industry Regulatory Authority—is a nongovernmental organization that regulates the ethical activities of broker-dealer firms and registered brokers in the U.S.

In July 2007, FINRA was created through the consolidation of the National Association of Securities Dealers (NASD) with the member regulation, enforcement, and arbitration operations of the New York Stock Exchange (NYSE).

Note

By ensuring that registered brokers comply with its ethics rules, FINRA detects and prevents wrongdoing in the U.S. markets, fosters transparency, and educates investors to help protect themselves against financial fraud.

For example, if a broker-dealer misleads you by providing you with false reports that misstate your account performance, FINRA may suspend the broker and issue a fine of $20,000.

How FINRA Works

FINRA’s mission, according to its website, is “to safeguard the investing public against fraud and bad practices.” To be licensed to operate in the U.S., brokers must pass FINRA qualification exams and fulfill continuing education requirements. FINRA examiners review broker advertisements, websites, sales brochures, and other communications to make sure investment information is presented in a fair and balanced manner.

FINRA has more than 3,600 employees and 19 offices nationwide. FINRA-trained financial examiners use technology to monitor how brokers are operating. They conduct routine examinations and respond to investor complaints and suspicious activity.

Among the information that FINRA publishes is an annual report for FINRA members (brokers) reviewing its examination and risk monitoring program. This program addresses several regulatory key topics in four categories: firm operations, communications and sales, market integrity, and financial management.

Note

FINRA operates BrokerCheck, a free online tool that investors can use to research the background and experience of financial brokers, advisers, and firms.

FINRA Arbitration and Mediation

Investors can inform FINRA about potentially fraudulent or suspicious activities by brokerage firms or brokers. They can also try to recover damages by filing a request to have FINRA officials arbitrate or mediate a case.

In arbitration, the arbitrator’s decision is binding and final. In mediation, either party in a dispute can decide to stop and seek resolution in another manner. FINRA mediators and arbitrators have subject matter expertise in securities matters.

Pros and Cons of FINRA

Pros

    • Protects investors against abuses and fraud
    • Tests, qualifies, and oversees broker activity
    • Provides a means for investors to file complaints and resolve disputes regarding brokers
Cons

    • Is not accountable to any governmental body
    • Has been criticized by some U.S. senators and others for not doing enough to fulfill its mission of protecting investors

Pros Explained

  • Protects investors against abuses and fraud: FINRA is authorized by Congress to protect investors by making sure the broker-dealer industry markets itself accurately, operates fairly, and treats investors honestly.
  • Tests, qualifies, and oversees broker activity: FINRA oversees more than 624,000 registered brokers across the U.S. It certifies brokers through qualification exams and requires continuing education each year.
  • Provides a means for investors to resolve disputes: Investors can file a complaint with FINRA to request that a broker be investigated and seek to recover damages through mediation or arbitration.

Cons Explained

  • FINRA is not accountable to any governmental body: Critics such as The Heritage Foundation state that the self-regulated FINRA “operates with nearly as much power as a government agency, but without essential checks on that power.”
  • Criticized for not doing enough to protect investors: Some politicians believe that misconduct by brokers has not been sufficiently penalized to deter future improper actions. Other critics believe FINRA needs more transparency.

FINRA is touted as the front-line regulator of broker-dealers in the U.S. and an advocate for investors, but it also comes under criticism for being a self-regulated organization that is not accountable to the Securities and Exchange Commission (SEC) or any governmental body.

What’s more, some feel that FINRA does not do enough to fulfill its mission of protecting investors against fraudulent and unethical actions by brokers. U.S. Sen. Elizabeth Warren, D-Mass., is one prominent public figure who has long criticized FINRA for not doing enough to protect investors from fraudulent practices.

In a 2016 letter to the then-chairman and CEO of FINRA, Warren and Sen. Tom Cotton, R-Ark., stated that misconduct among brokers and repeat offenders within the securities broker world “persists, in part, because of ineffective sanctions for advisers.”

What It Means for Investors

FINRA plays a key role in protecting individuals against fraudulent or unethical activity on the part of broker-dealers. The FINRA website includes thorough information on filing a complaint.

For investors who believe they have been victims of unethical practices by brokers, FINRA also offers a means to resolve disputes and recover damages through arbitration or mediation.

Read the full article here

Featured
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Articles

Here’s How Much Medicare Costs Could Increase in Just 10 Years (and How to Plan)

Burrow July 17, 2025

20 Part-Time Jobs With Excellent Pay and Flexibility

Make Money July 17, 2025

JPMorgan Worth More Than Citi, Bank of America, Wells Fargo

Make Money July 17, 2025

Judge’s Rule Reversal Means Medical Debt Could Impact Your Credit Report

Burrow July 16, 2025

What the New Tax Law Changes for Slot Machine Players

Make Money July 16, 2025

9 Long-Held Traditions That Are Quietly Wrecking Family Finances

Budgeting July 16, 2025
Add A Comment

Leave A Reply Cancel Reply

Demo
Top News

Here’s How Much Medicare Costs Could Increase in Just 10 Years (and How to Plan)

July 17, 20250 Views

20 Part-Time Jobs With Excellent Pay and Flexibility

July 17, 20250 Views

JPMorgan Worth More Than Citi, Bank of America, Wells Fargo

July 17, 20250 Views

How An Economist Thinks About “Trump Accounts”

July 16, 20250 Views
Don't Miss

Judge’s Rule Reversal Means Medical Debt Could Impact Your Credit Report

By News RoomJuly 16, 2025

Drazen Zigic / Shutterstock.comAdvertising Disclosure: When you buy something by clicking links within this article,…

What the New Tax Law Changes for Slot Machine Players

July 16, 2025

9 Long-Held Traditions That Are Quietly Wrecking Family Finances

July 16, 2025

Why Skipping This One PR Move Could Stall Your Startup’s Growth Before It Even Begins Doing PR is critical for startups, yet many entrepreneurs are so busy developing their product that they forget to make a media plan.

July 16, 2025
About Us
About Us

Your number 1 source for the latest finance, making money, saving money and budgeting. follow us now to get the news that matters to you.

We're accepting new partnerships right now.

Email Us: [email protected]

Our Picks

When It Comes To Medicare Cards, What’s In Your Wallet?

July 17, 2025

Here’s How Much Medicare Costs Could Increase in Just 10 Years (and How to Plan)

July 17, 2025

20 Part-Time Jobs With Excellent Pay and Flexibility

July 17, 2025
Most Popular

Allstate Takes New Approach to Return-to-Office: Coworking

November 19, 20243 Views

10 Places to Find Lost Money at Home

October 5, 20241 Views

Memorable Stories, Feuds, and Rumors That Made Ed Sullivan …

August 5, 20231 Views
Facebook Twitter Instagram Pinterest Dribbble
  • Privacy Policy
  • Terms of use
  • Press Release
  • Advertise
  • Contact
© 2025 Solutions For Real. All Rights Reserved.

Type above and press Enter to search. Press Esc to cancel.