Bipartisan Support Moves Unpaid Arb Award Bill Closer to Reality
A bill aimed at ensuring unpaid Finra arbitration awards get paid now has bipartisan backing, which improves its chances of going forward, experts tell InvestmentNews.
Written by Sen. Elizabeth Warren, D-Mass., the bill would require the industry’s self-regulator to fund a pool for covering unpaid arbitration awards, using money from penalties Finra receives from its member firms. Last month, Warren’s bill received backing from Sen. John Kennedy, R-La., who cosponsored her legislation, InvestmentNews writes.
"These investors have already been swindled out of their money once, and thousands of them still haven't been given their unpaid arbitration,” Kennedy said in a statement last month, according to the publication. “Our bill aims to fix that."
With Kennedy on board, unpaid arbitration awards have “become a bipartisan issue,” Andrew Stoltmann, a securities lawyer and president of the Public Investors Arbitration Bar Association, tells InvestmentNews. And despite the difficulty of pushing through legislation in an election year, Republican backing will significantly boost the chances of the bill getting enacted, David Burton, senior fellow in economic policy at the Heritage Foundation, tells the publication.
Unpaid arbitration awards ranged from $14 million in 2016 to $75 million in 2013, according to a report Finra released earlier this year, InvestmentNews writes. The regulator has considered creating a pool to fund the unpaid awards among the options it’s considering to deal with the issue, but it hasn’t endorsed any particular solution yet and isn’t taking a position on Warren’s legislation, according to the publication.