Finra board to consider crackdown on high-risk brokers, unpaid arbitration awards

The board of the Financial Industry Regulatory Authority Inc. next week will address two nettlesome issues for the broker-dealer self-regulator: brokers with disciplinary histories who keep resurfacing in the industry and brokerages that fail to pay arbitration awards. The group "will consider proposed rule amendments and other steps designed to heighten the oversight of high-risk brokers and the firms that employ them," states its agenda for the May 10 meeting in New York City. Dealing with recidivist brokers has been an ongoing challenge for Finra. The board also will mull amendments to Finra's arbitration procedures and Form U4 regarding payment of arbitration awards by firms and brokers. A study last year by the Public Investors Arbitration Bar Association showed that $62 million in arbitration awards were not paid to investors in 2013, or about 25% of the total owed to investors for damages that year. Unpaid arbitration claims also have caught the attention of Capitol Hill. Last month, Senate Democrats called on Finra to create a fund to compensate investors for unpaid arbitration claims.