FINRA Publishes List of Firms and Advisors With Unpaid Arbitration Awards

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The Financial Industry Regulatory Authority published a list of firms and individuals responsible for unpaid arbitration awards on its website Tuesday. 

The self-regulatory organization overseen by the Securities and Exchange Commission has been criticized for not making the list more accessible but said the new format addresses that complaint. All of the firms and advisors on the list are those whose FINRA registration has been terminated, suspended, canceled or revoked, or who have been expelled from FINRA, the agency said. FINRA suspended 154 individuals for failing to pay arbitration awards from 2012-2016. During this same time period, there were on average 635,778 individuals registered with the agency. Firms that argue they can't pay arbitration awards due to bankruptcy have also been listed.

Many advisors on the list appear to have worked for themselves or smaller firms. But some, like Paul Arnold, who spent 16 years at Raymond James, worked at larger ones. Others had stints at Prudential, Ladenburg, SagePoint Financial, Morgan Stanley, Merrill Lynch and Wells Fargo.

Approximately 69 percent of FINRA arbitrations result in settlements reached by the parties, 18 percent proceed to an award and 2 percent of awards go unpaid, according to the regulator. 

Although the list only includes data from 2012-2016, unpaid arbitration awards continued to be an issue in 2017, according to a recent report by the Public Investors Arbitration Bar Association, which has advocated for FINRA to address the issue. The report found that nearly 36 percent of investors who won their cases collected nothing. Twenty-eight cents of every dollar awarded went unpaid last year.


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