More About FINRA

 

Who We Serve

  

FINRA serves every U.S. investor—from newlyweds planning to buy a home, parents saving for a child's college education to seniors depending on a secure retirement.

Every one of the 53 million American investing households FINRA serves has unique needs, but all rely on one thing: fair financial markets. That is why FINRA works every day to ensure investors receive the basic protections they deserve.

Every investor deserves fundamental protections when investing in the stock market. Whether Americans are investing in a 401(k) or other thrift, savings or employee benefit plan, or in a mutual fund, ETF or variable annuity, FINRA works every day to ensure that:

 

1. anyone who sells a securities product has been officially tested, qualified and licensed
    
2. every securities product advertisement used is truthful, and not misleading
    
3. any securities product promoted or sold to an investor is suitable for that investor's needs
    
4. investors receive complete disclosure about the investment product before purchase

 

What We Do

FINRA touches virtually every aspect of the securities business—from registering and educating industry participants to examining securities firms; writing rules; enforcing those rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms.

When rules are broken, we take action—meaning we can fine, suspend or expel firms or individual brokers from the business. We frequently require firms to return money to investors who have been harmed. In this role of "cop on the beat," FINRA ensures that all investors receive the basic protections they deserve—regardless of what kind of financial product they buy or who sells it to them.

FINRA is every investor's advocate:

• When a registered person misappropriated money from two trust funds established to provide living expenses and medical care for a disabled child, FINRA took action, barring the individual from the industry. The representative—who was trustee for the funds—used the funds’ money for his own benefit, and fabricated account statements and correspondence that overstated the value of the trusts’ assets. At one time, the rep reported one of the trusts held more than $585,000 when the fund’s assets totaled about $180.
• FINRA suspended a registered representative who made excessive trades in the accounts of seven unsophisticated, retired senior investors. The representative recommended that the customers make frequent mutual fund trades and also recommended the customers buy shares that were designed for long-term investors. In addition to the two-year suspension, FINRA fined the representative and ordered that he pay $166,914 in restitution plus interest.
• FINRA barred a representative from the industry after finding that the individual misappropriated more than $50,000 from customers’ bank accounts. After obtaining temporary debit cards linked to the customers’ accounts, the representative withdrew cash for his own use and made purchases at various retail stores.
• FINRA barred a representative from the industry for making unauthorized trades in three customer accounts, including accounts of two customers who had died about a week before the trades were executed. The representative also recommended some elderly customers purchase reverse convertible instruments that were not suitable for them.