Finra’s $1.6B fund missing out on market rebound
The value of the Financial Industry Regulatory Authority Inc.'s $1.6 billion investment fund decreased by 27% last year because of an aggressive strategy, and now the fund appears to be missing out on the recent market surge because Finra went more conservative this year, according to The Wall Street Journal.
The value of the Financial Industry Regulatory Authority Inc.’s $1.6 billion investment fund decreased by 27% last year because of an aggressive strategy, and now the fund appears to be missing out on the recent market surge because Finra went more conservative this year, according to The Wall Street Journal.
Playing it safe has caused the Finra fund to miss out on the 48% gains recorded by the Dow Jones Industrial Average since early March, the report added. The regulator has seen 12% in returns so far this year, Finra officials told Wall Street Journal.
The losses, however, “have in no way hindered our ability to fulfill our regulator responsibilities,” a Finra spokeswoman told the Journal.
Several Finra member firms beg to differ. They cannot stomach the volatile ride the organization has been putting them through since last year, according to the Journal.
Amerivet Securities Inc. of Inglewood, Calif., filed a lawsuit against Finra last month for being “reckless in pursuing high-risk strategies inappropriate to preservation of capital,” the newspaper reported.
Finra invested heavily last year in private equity, hedge funds and other dwindling assets.
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