In a recent development that fuels the ongoing debate about the role of self-regulatory organizations (SROs), a Utah-based securities brokerage firm, Alpine Securities Corp., has managed to maintain its business operations while challenging an industry ban imposed by the Financial Industry Regulatory Authority (FINRA)
As reported by Bloomberg, FINRA, the self-regulator of Wall Street, attempted to ban Alpine Securities from the industry. The ban came after FINRA found that the brokerage firm had increased its customer fees by an astounding 60,000% and breached a cease-and-desist order an astounding 35,000 times.
The brokerage firm, however, is decidedly not backing down. Alpine Securities not only contested FINRA’s finding but also was successful in obtaining a court injunction that keeps them in operation while their appeal is pending. This appeal directly challenges the base authority of the regulatory body.
Alpine Securities has asserted that despite wielding the power akin to a government agency, FINRA does not function with similar constitutional restraints and accountability. This accusation questions the legitimacy of FINRA’s actions and places its fundamental power under scrutiny.
This case further escalates the concern surrounding self-regulatory bodies and their actual enforcement capabilities in the industry. Let’s keep an eye on the progression of this intriguing legal dispute in the course of the year.