I am contemplating bringing a complaint against a brokerage regarding an order in good standing that was not processed correctly.

If FINRA does find against the broker, other than fines/sanctions, what are FINRA's powers? Are they able to force a trade backdated, force a backdate deposit... etc?


It depends on the nature of the complaint as well as how the other party decides to respond. Here are my two experiences with this and they are not a representation of all that FINRA does in such situations.

1) In 1987, I had a $15 covered call position on Bear Stearns that expired two points in-the-money. I should have been assigned. The next trading day was the crash of 1987 and it took Paine Webber 8 days to figure out whether I had been assigned or not. By then, BSC had dropped to about $13. I had been unable to defend the position if indeed I still owned it. I indicated that I was going take take them to arbitration and they chose to settle, crediting my account with $200 per 100 shares.

2) During the Internet craze, I was dealing with a number of firms, one of which was a "Maggot Mile" broker (located in Boca Raton Florida) who had a string of IPOs that opened for trading on their first day at multiples of the IPO price. I knew what I was dealing with. I did 3 of them and for the last one, the broker refused to execute a trade to sell the balance of a profitable equity position (brokers lose allocation in future deals if their clients are flippers). My loss was the gains since I had sold some shares already. Shortly thereafter, the SEC closed the firm down due to illegal practices and poof, profits gone,

I filed a complaint against the broker and the firm. I had no expectation of receiving remuneration since the firm was kaput. I just wanted to put a "Yes" violation on the broker's license (I don't know the specific terms). It was all handled by mail. I provided a written statement and other documentation and then each party responded back and forth. After about 8 months, I received a verdict in my favor, 50% against the broker and 50% against the brokerage firm. In order to get a job at a new firm, the broker had to settle with me. Found money.

FINRA has a process for arbitration:


Don't bother with a complaint unless you can provide clear cut evidence of malfeasance.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.