According to a recent InvesmentNews article, the Financial Industry Regulatory Authority (FINRA) will address unpaid arbitration awards and high-risk brokers with disciplinary histories. FINRA will “consider proposed rule amendments and other steps designed to heighten the oversight of high-risk brokers and the firms that employ them.” The FINRA board will also decide whether to put into play amendments to its arbitration procedures and Form U4 regarding payment of arbitration awards by firms and brokers. Last year, a study by the Public Investors Arbitration Bar Association (PIABA) showed that $62 million in arbitration awards were not paid to investors in 2013. That is about 25% of the total owed to investors for damages that year. Last month, Senate Democrats called on FINRA to create a fund to compensate investors for unpaid arbitration claims.
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