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2023 Office of the Ombuds Report

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Only when people are aware of the Office of the Ombuds can they seek our assistance. This is why we strive to increase our outreach to our constituents—investors, the broker-dealer industry, FINRA staff, and any other FINRA stakeholders. In 2023, our outreach included meeting with investor representatives; participating in investor, industry, and employee events; and enhancing our online presence.

In this report, we reiterate our mission and provide information about who contacts us and how we help them. We also address topics constituents raised with us in 2023 and related resources. Investor-related topics range from fraudulent schemes to FINRA's handling of investor complaints and arbitrations. Industry-related topics include concerns about FINRA's disciplinary process, qualification examinations, and testing accommodations.

Since adding a Spanish language webpage and portal in 2023, more Spanish-speaking investors are contacting the Office of the Ombuds and using our resources. In one case, a Spanish-speaking investor shared that information on our Spanish language webpage helped him realize that a person he had been communicating with, who claimed to be a FINRA employee, was actually a fraudster. As a result, the investor did not send the requested funds to the fraudster.

Again, only when people are aware of us can they seek our assistance. And this is why we will continually strive to increase our outreach to FINRA stakeholders. We hope you find this report informative. Please contact us if you have questions, feedback, or seek our assistance.

Sincerely,

Sarah Gill
FINRA Ombuds


Mission and Role

Our mission is to provide a forum for individuals who interact with FINRA to voice concerns of unfair FINRA practices or treatment.

As an independent, neutral and confidential source of assistance, the Office of the Ombuds addresses concerns and complaints—whether anonymous or not—about operations, enforcement, or other activities of FINRA and its employees.  We also answer questions and help people navigate FINRA.

What is a FINRA Ombuds?

Independent
We report directly to the Audit and Risk Committee of FINRA’s Board of Governors. We are not part of the management of FINRA.

Neutral
Our role is to advocate for fair FINRA processes and fair administration of those processes. We do not take sides. We do not advocate on behalf of any individual or FINRA.

Confidential
We take reasonable steps to safeguard the confidentiality of your identity and communications with us. Exceptions include imminent risk of serious harm and legal requirements.

FINRA (the Financial Industry Regulatory Authority), is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—member broker-dealers doing business with the public in the U.S. FINRA, overseen by the U.S. Securities and Exchange Commission, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and broker-dealers and their registered employees.

How can the Office of the Ombuds help you?

We can assist you if you interact with FINRA and:

  • You have concerns of unfair practices or treatment.
  • You have questions regarding navigating FINRA.
  • You seek guidance about available options.

Initial Contact

  • We will listen to you, ask questions, and discuss your matter.
  • We will ask what outcome you seek.
 

Next Steps

  • We will determine if and/or how we can assist you.
  • We will review documents and other records relating to your matter.
  • If appropriate and without sharing confidential information, we will discuss your matter with management.
  • We will research and review rules, regulations, policies, and procedures.
 

Resolution

  • We will discuss options for addressing your concern or inquiry.
  • We will answer any remaining questions.
  • We will provide you with relevant information and resources.
  • If relevant, we will discuss trends and concerns with management.

Ombuds Adding Value

During a time of rapid change, ombuds are a source of insight and guidance for organizations. The topics our constituents raise provide early warning signs for emerging issues. FINRA’s Office of the Ombuds shares—in a manner that protects confidentiality—issues and concerns to inform the organization of potential challenges and their associated risk. When appropriate, we also offer recommendations that may include changes to procedures, policies, and FINRA rules.

FINRA’s ombuds team is willing and ready to help support positive change when required. However, we can only do that when we hear from you.

What does the Office of the Ombuds NOT do?

  • The Office of the Ombuds is neutral, so we do not take sides.
  • We cannot make FINRA management decisions or policy, though we can offer recommendations to management.
  • We are not the FINRA team that handles investigations of customer complaints about broker-dealers and their associated persons.
    • Please file such complaints with FINRA here.
    • Visit this page to file a tip about potentially fraudulent, illegal, or unethical activity relating to financial services.
  • We cannot provide confidential regulatory information, such as the outcome of regulatory investigations.
  • We do not replace existing FINRA processes or programs.
    • Unless doing so is not feasible, before contacting us with a concern, we ask that you raise your concern with the relevant FINRA department or follow any established process. We are available to help you identify such options.
  • We cannot handle matters outside the scope of FINRA’s jurisdiction.

Who contacts the Office of the Ombuds?

Of the people who contacted us in 2023:

73% were Investors
Members of the public who currently have an investment account or may intend to open an investment account.

15% were Associated Persons
Individuals associated with FINRA member broker-dealers.

3% were Broker-Dealers
Firms that are, were, or seek to be members of FINRA.

2% were FINRA Employees
FINRA employees or contractors.

1% were Issuers
Publicly traded companies appearing on an exchange or another quotation system.

6% were Miscellaneous
Individuals providing information about potentially fraudulent, illegal, or unethical activity; arbitrators; attorneys not calling on behalf of constituents; authors; and visitors who did not identify themselves.

What do people address when they contact us?

The following overview provides a sample of the topics we addressed in 2023.

Scams

Individuals from multiple countries contacted us about fraudulent schemes. Some of the schemes were imposter scams that involved people fraudulently pretending to be FINRA staff to obtain account or other sensitive information. Others were advance fee schemes in which investors were told they must pay a fee in advance to redeem their funds. We answered questions about the fraudulent activity, shared educational resources, and took other steps as necessary.

Investor Complaints and Regulatory Tips

We received complaints from investors about FINRA staff’s handling of their complaints relating to broker-dealers and information provided about potentially fraudulent, illegal, or unethical activity (regulatory tips). Many of these complaints pertained to FINRA staff not being able to provide details regarding FINRA’s investigations. Because FINRA’s investigations are confidential, FINRA staff are not able to share investigative steps or findings. We reviewed FINRA staff’s work and addressed questions or concerns with management.

FINRA Dispute Resolution Services

We received complaints and inquiries from investors, attorneys, associated persons, arbitrators, and broker-dealers regarding arbitration and mediation. Some matters related to individuals’ experiences in the forum. Others related to the outcome or process of arbitrations. We facilitated communication, provided resources, reviewed FINRA staff’s work, and addressed questions or concerns with management.

Concerns from Associated Persons

Individuals associated with broker-dealers contacted us with concerns relating to their interactions with FINRA regarding BrokerCheck, qualification examinations, testing accommodation requests, and other topics. We provided resources, facilitated communication with staff, reviewed FINRA staff’s work, and addressed questions or concerns with management.

FINRA’s Disciplinary Process

Industry constituents and investors inquired and raised concerns about FINRA’s disciplinary process. FINRA disciplines broker-dealers and their associated persons for not complying with relevant securities laws and rules. Discipline can take many forms, including restitution for harmed customers, fines, suspension or bar from associating with any FINRA member firm, and expulsion from FINRA membership. We explained the disciplinary process, reviewed FINRA staff’s work, and addressed questions or concerns with management.

Rules and Regulations

Constituents complained about rules relating to topics such as pattern day trading, short sales, BrokerCheck disclosures, financial and operational requirements for broker-dealers, and residential supervisory location. We shared information with management and provided resources to the constituents.

Contact the Ombuds team when you want to raise an issue and you:

  • Seek confidentiality or anonymity.
  • Seek assistance that is neutral.
  • Want to speak with someone independent from FINRA’s regulatory role.

You can contact us anonymously or confidentially. 

Submit Online here.

Please provide feedback about our assistance by taking this brief anonymous survey: www.surveymonkey.com/s/FINRAOmbuds