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Finra Shames Advisors Who Owe Unpaid Arbitration Awards

December 5, 2018

Self-regulator Finra has published a list of advisors and firms who have not paid arbitration awards ordered by the regulator, according to news reports.

Finra says 69% of its arbitrations end with settlements and 18% result in an award —and only 2% of those awards go unpaid, according to WealthManagement.com.

But according to a recent report by the Public Investors Arbitration Bar Association, close to 36% of investors awarded monetary compensation by Finra in 2017 have not received anything at all, the web publication writes.

Finra’s format for the new list is meant to address criticism that it should be easier to find individuals and firms responsible for unpaid awards, WealthManagement.com writes. The current list, published on Finra’s website yesterday, is comprised of firms and advisors who have been expelled by the regulator or whose registration has been terminated, canceled, suspended or revoked, Finra says, according to the web publication.

But the list only includes data from 2012 to 2016, during which time Finra suspended 154 individuals for failure to pay arbitration awards, WealthManagement.com writes.

Many of the individuals appear to have been solo practitioners or have worked at smaller practices, but some had stints at firms such as Raymond James, Morgan Stanley, Merrill Lynch and Wells Fargo, according to the web publication.

In addition, the list includes firms who say they’re not able to pay the awards because of a bankruptcy, WealthManagement.com writes.


Lawmakers have recently put forward legislation that would ensure arbitration awards get paid. This summer, Sen. Elizabeth Warren, D-Mass., was able to get bipartisan backing for a bill she wrote that would require Finra to fund a pool designed specifically for covering unpaid awards.

Sen. John Kennedy, R-La., cosponsored her legislation.

By Alex Padalka
  • To read the Wealth Management article cited in this story, click here.