SEC OKs FINRA Change Nixing Inability-To-Pay Defense

Law360, New York (June 4, 2010, 5:14 PM EDT) -- The U.S. Securities and Exchange Commission has approved a rule change that will block brokers who fail to make good on a Financial Industry Regulatory Authority arbitration award in favor of a customer from using the "inability to pay" defense to avoid suspension.

The SEC issued an order Wednesday approving the change. FINRA filed the proposed amendment to FINRA Rule 9554 with the SEC on March 31, and FINRA's filing said the change would become official 30 days after the commission's approval.

The proposed change was...
To view the full article, register now.