The Financial Industry Regulatory Authority (FINRA) is a non-governmental organization that regulates member brokerage firms and exchange markets. Created in 2007 through the merger of the National Association of Securities Dealers (NASD) and the regulation, enforcement, and arbitration functions of the New York Stock Exchange, FINRA’s primary mission is to protect investors by ensuring the broker-dealer industry operates fairly and honestly. FINRA oversees more than 3,500 securities firms and approximately 630,000 registered representatives. It develops and enforces rules, conducts examinations, fosters market transparency, and educates investors, aiming to uphold the integrity of the financial markets.
FINRA arbitration is a dispute resolution process offered by the Financial Industry Regulatory Authority (FINRA) to resolve conflicts between investors, brokerage firms, and individual brokers. Unlike traditional court litigation, arbitration is typically faster and less formal. In this process, an impartial arbitrator or a panel of arbitrators listens to both parties’ arguments and evidence before making a binding decision. This method is often chosen for its efficiency and lower costs, making it an attractive option for investors seeking resolution without the complexities of a court trial. The arbitration process is governed by specific rules and procedures, ensuring a fair and equitable hearing. While the decision is final and generally cannot be appealed, parties can still settle the dispute before the arbitration concludes. FINRA arbitration serves as a crucial mechanism in maintaining market integrity and protecting investors’ rights.
