Case Study: Fiero V. FINRA

Law360, New York (October 24, 2011, 1:41 PM EDT) -- On Oct. 5, 2011, in Fiero v. FINRA, No. 09-1556-cv (2d Cir. Oct. 5, 2011), the United States Court of Appeals for the Second Circuit held that the Financial Industry Regulatory Authority and other self-regulatory organizations lack the authority to bring federal court actions to collect on their disciplinary fines.

The decision leaves in its wake an apparent gap in FINRA’s enforcement arsenal; it can levy fines, but it cannot enforce collection of those fines in court. Although the import of this revelation might seem considerable...
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