A rebate of regulatory fees recently approved by the Financial Industry Regulatory Authority has come under criticism from a group representing investors’ attorneys, according to WealthManagement.com.
Last month, FINRA said that due to higher-than-expected net income resulting primarily from higher-than-expected trading activity and industry revenue, the Board of Governors approved a $100 million rebate for active member firms in good standing as of December 31, 2025 and that paid FINRA fees in 2025.
But the decision was denounced by the Public Investors Advocate Bar Association (PIABA). The organization’s leader, Michael Bixby, labelled the member fee rebate, FINRA’s second in two years, as a “parody of justice”. The PIABA said the excess fees should have been used to pay unpaid arbitration awards (PIABA estimates about $80 million in FINRA arbitration awards between 2020 and 2024 went unpaid).
Bixby, PIABA’s president and a managing attorney with the Florida-based law firm Bixby Law, said the rebate “tarnishes the reputation of FINRA.”
“Retirement savers and investors who are the victims of misconduct rely on FINRA’s arbitration forum to hold bad actors accountable. That is part of FINRA’s job,” he said. “It’s unconscionable that FINRA has now paid out over $150 million to Wall Street, all while innocent Main Street investors are still waiting for justice and to put their lives back together.”
The latest FINRA rebate follows a separate rebate of $50 million paid to member firms last year with respect to 2024 fees.
Each qualifying member firm will receive an amount determined based on its 2025 regulatory fees. The rebate includes the full annual minimum fee of $1,200, with the remainder allocated proportionally based on each firm’s other 2025 regulatory fees. This allocation method follows FINRA’s approach in prior discretionary rebates to member firms. According to the notice, “FINRA believes that the fee rebate will not adversely impact its short- or long-term financial planning or ability to perform our regulatory responsibilities for the benefit of investors, members, and capital markets.”
But the PIABA emphasized the importance of earmarking the excess fees to address the shortfall in arbitration awards.
According to Bixby and FINRA, in 2024, about 37 cents out of every dollar of FINRA arbitration awards to customers went unpaid, and one out of four cases where damages were awarded were not paid (since many investor claims that seem unlikely to be paid are never pursued, PIABA predicts the problem is even harder).
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