News | 02.11.20
FINRA Proposal to Clamp Down on Firms, Reps With Unpaid Arb Awards Moves Forward
FINRA has submitted a proposal with the SEC that would prevent registered representatives from moving to a new firm and brokerages from transferring assets to avoid paying arbitration awards. The SEC published the proposal in the Federal Register on Dec. 30. and begin accepting public comments. FINRA recently responded to the comments by making a technical change to the proposal. If the SEC approves the proposal, FINRA would deny a new membership application if a brokerage or its representatives have pending arbitration claims where there is a concern about payment of potential awards or settlements. The proposal would also force companies with numerous unpaid arbitration awards to submit an application for continuing membership and agree to greater scrutiny if they try to move assets, management, or owners to another firm and close down.
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