The US Supreme Court let the Financial Industry Regulatory Authority proceed with disciplinary proceedings against a brokerage accused of stealing from customers in a case testing Wall Street’s longstanding reliance on self-regulatory organizations.
The justices without comment turned away an appeal from Alpine Securities Corp., which argued that a lower court didn’t go far enough when it blocked Finra from expelling the brokerage until the Securities and Exchange Commission weighs in. Alpine said the federal appeals court should have stopped proceedings altogether while the legal fight goes forward.
The rebuff is a win for Finra on one aspect of a broader fight that threatens to undercut the authority of self-regulatory organizations. Alpine is pressing multiple arguments that Finra’s powers and structure are unconstitutional.
The rejection follows Chief Justice John Roberts’s decision in March not to immediately halt the Finra proceedings against Alpine while the Supreme Court weighed how to handle the case.
In partially siding with Alpine, the US Court of Appeals for the DC Circuit said the Constitution probably prohibits Finra from unilaterally expelling a brokerage. The decision, which invoked the so-called private non-delegation doctrine, called into question Finra’s ability to oust members through expedited proceedings that bypass the SEC.
At the Supreme Court, Alpine said that conclusion should have prompted the DC Circuit to suspend Finra’s disciplinary action. Alpine said being forced to defend against Finra charges — even if the decision is ultimately overturned — constitutes a “here-and-now injury” that Supreme Court precedent requires judges to prevent.
Finra, backed by the Trump administration, urged the Supreme Court not to intervene. Finra said it is “commonplace for parties to endure a proceeding even when it might be overturned on appeal.”
Finra accuses Alpine of stealing more than $54 million from its clients through excessive fees and the unauthorized conversion of customer securities and then violating a cease-and-desist order more than 35,000 times. Alpine denies the allegations.
The US financial markets are overseen by a number of self-regulatory organizations, including stock exchanges and clearinghouses.
The case is Alpine Securities v. Finra, 24-904.
A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.
Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.
Some in the industry say that more UBS financial advisors this year will be heading for the exits.
The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.
Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
