Monday, March 23, 2015
Event or Conference:
The Financial Industry Regulatory Authority (FINRA) is an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly. In 2013 FINRA brought 1,535 disciplinary actions against registered brokers and firms and levied more than $65 million in fines. In addition, 2383 FINRA arbitration cases were filed by investors against brokers and advisors. This article supplies empirical support for the assertion that many investor complaints and arbitration cases filed with FINRA are driven by market losses rather than broker fraud. FINRA arbitration cases filed from 1999-2013 are negatively correlated with market performance as measured by the S&P 500 Index.