FINRA

FINRA stands for the Financial Industry Regulatory Authority. It is a non-profit organization that regulates member brokerage firms and exchange markets. FINRA’s primary purpose is to protect investors by ensuring that the Securities industry operates fairly and honestly. It oversees the activities of brokerage firms, creates and enforces rules for their operations, and administers the licensing and testing of registered representatives.

Examples of FINRA’s functions include:

• Enforcing rules that require brokers to provide suitable investment recommendations to their cLients.
• Conducting regular Audits and examinations of member firms to ensure compliance with regulations.
• Providing an online tool called BrokerCheck, which allows investors to research the professional backgrounds of brokers and firms.

Notable cases involving FINRA include:

• A case in which a major brokerage firm was fined for failing to supervise its brokers adequately, leading to customer losses.
• Disciplinary actions against brokers who engaged in fraudulent activities, resulting in penalties and bans from the industry.