finra

FINRA

For Release:
Contacts:
Monday, September 15, 2008
Nancy Condon (202) 728-8379
Herb Perone (202) 728-8464

 

 

FINRA Advises Investors on How to Safeguard Their Brokerage Accounts

Washington, DC – In light of the current turbulence on Wall Street, the Financial Industry Regulatory Authority (FINRA) today issued guidance to retail investors regarding regulatory protections in place to safeguard their accounts and the steps they can take to protect themselves when a brokerage firm fails.

 

"It's unavoidable that investors will have anxiety about their accounts in light of current events," said FINRA CEO Mary L. Schapiro. "But the first thing an investor should do is avoid acting out of panic. There are significant regulatory protections and procedures in place to make sure accounts are safe and, if necessary, be transferred to a financially healthy brokerage firm."

 

FINRA's Investor Alert If a Brokerage Firm Closes Its Doors outlines:

 

  • The regulatory safety net in place to protect customer accounts – and the steps investors themselves can take – when a brokerage firm closes its doors.

  • While Lehman Brothers Holdings Inc. filed for protection under Chapter 11 of the bankruptcy laws this morning, the firm's U.S. regulated broker-dealer, Lehman Brothers, Inc., is still solvent and functioning. The broker-dealer has not filed for bankruptcy, and it is expected to close only after the orderly transfer of customer accounts to another registered and SIPC-insured broker-dealer.

  • The role that FINRA and other regulators play in monitoring firms for compliance with investors protection rules.

  • The protections offered to investors through the Securities Investor Protection Corporation (SIPC), along with a step-by-step description of how SIPC works.

  • An Investor Checklist investors can use to minimize the chances of being involved with a brokerage firm that ends up in financial distress.

 

In order to ensure that the investing public is protected, staff from the Securities and Exchange Commission and FINRA are currently working on-site at Lehman Brothers to oversee the orderly transfer of customer assets to one or more SIPC-insured brokerage firms.

 

The Alert advises Lehman customers with questions about their accounts or the liquidation process to contact FINRA at (301) 590-6500 or the SEC at help@sec.gov.

FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. Created in 2007 through the consolidation of NASD and NYSE Member Regulation, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business—from registering and educating all industry participants to examining securities firms; writing and enforcing 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. For more information, please visit our Web site at www.finra.org.