Official announcements or publications by the SEC

Federal Court Rules Against FINRA's Unilateral Expulsion Power, SEC Review Needed

Nov 22, 2024, 05:07 PM

A federal appeals court has ruled that the Financial Industry Regulatory Authority (FINRA) does not have the authority to unilaterally expel brokerages it claims have engaged in misconduct. The decision, which came from the DC Circuit in the case of Alpine Securities v. FINRA, states that FINRA needs permission from the Securities and Exchange Commission (SEC) before taking such actions. This ruling is being closely watched by Wall Street, as it impacts the regulatory powers of the financial industry's self-regulator. The court also noted that FINRA lacks the power to expel brokerages on an expedited basis without SEC review.