Expedited Suspension

Under FINRA rules, industry parties must pay arbitration awards within 30 days or face suspension by FINRA. Specifically, FINRA Rule 9554 contains expedited suspension procedures that address a firm or associated person's failure to pay FINRA arbitration awards.

Although FINRA eliminated the "bona fide inability to pay" defense in customer cases, a firm or associated person would still have available the four other enumerated 9554 defenses:

  1. the firm or associated person paid the award in full;
  2. the parties have agreed to installment payments or have otherwise settled the matter;
  3. the firm or associated person has filed a timely motion to vacate or modify the award and such motion has not been denied; and
  4. the firm or associated person has filed a petition in bankruptcy and the bankruptcy proceeding is pending or the award has been discharged by the bankruptcy court.

In addition, the "bona fide inability to pay" defense remains available to industry parties in non-customer intra-industry award cases.   

You also have the right to request a hearing before the FINRA Office of Hearing Officers to assert any of the Rule 9554 defenses. Any hearing request must be in writing and filed before the Effective Date with the Office of Hearing Officers. A timely request for a hearing will stay the Effective Date of the suspension.