2022 Office of Ombuds Report

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This report addresses developments in FINRA’s Office of the Ombuds, our mission and role, how we help constituents, who contacted us in 2022, and topics they raised.  This report also includes resources relating to those topics.

To better serve our constituents, we offer assistance in both English and Spanish.  As part of these efforts, and also to increase overall awareness about our role, we revamped our webpage and portal and added a Spanish webpage and portal.

What is in a name?  Recognizing the impact of word choice, we changed “Office of the Ombudsman” to a name that is not gender-specific: “Office of the Ombuds”.  This change is another step to demonstrate to our constituents our commitment to being inclusive.

I hope you find the report informative and helpful.  Please contact us if you have questions, have feedback about the report, or seek our assistance.

Sincerely,

Sarah Gill
FINRA Ombuds

Mission and Role

Our mission is to provide a forum for investors, broker-dealers, registered investment professionals, and others who interact with FINRA to voice concerns of unfair practices or treatment.

As an independent, neutral and confidential source of assistance, the Office of the Ombuds addresses concerns and complaints—whether anonymous or not—about operations, enforcement, or other activities of FINRA and its employees.  We also answer questions and help people navigate FINRA.

What is a FINRA Ombuds?

Independent
We are not part of the management of FINRA. We report directly to the Audit and Risk Committee of FINRA’s Board of Governors.

Neutral
We do not take sides. We do not advocate on behalf of any individual or FINRA. Our role is to advocate for fair FINRA processes and fair administration of those processes.

Confidential
We take reasonable steps to safeguard the confidentiality of your identity and communications with us. Exceptions include imminent risk of serious harm and legal requirements.

FINRA (the Financial Industry Regulatory Authority), is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—broker-dealers doing business with the public in the U.S. FINRA, overseen by the U.S. Securities and Exchange Commission, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and broker-dealers and their registered employees.

 

How can the Office of the Ombuds help you?

We can assist if you interact with FINRA and:

  • You have concerns of unfair practices or treatment.
  • You have questions regarding navigating FINRA.
  • You seek guidance about available options.

Initial Contact

  • We will listen to you, ask questions, and discuss your matter.
  • We will ask what outcome you seek.
 

Next Steps

  • We will determine if and/or how we can assist you.
  • We will review documents and other records relating to your matter.
  • If you permit and if appropriate, we will discuss your matter with management.
  • We will research and review rules, regulations, policies, and procedures.
 

Resolution

  • We will discuss options for addressing your concern or inquiry.
  • We will answer any remaining questions.
  • We will provide you with relevant information and resources.
  • If relevant, we will discuss trends and concerns with management.

 

Ombuds Adding Value

During a time of rapid change, ombuds are a source of insight and guidance for organizations. The topics our constituents raise provide early warning signs for emerging issues. FINRA’s Office of the Ombuds shares—in a manner that protects confidentiality—issues and concerns to inform the organization of potential challenges and their associated risk. When appropriate, we also offer recommendations that may include changes to procedures, policies, and FINRA rules.

FINRA’s ombuds team is willing and ready to help support positive change when required. However, we can only do that when we hear from you.

 

What does the Office of the Ombuds NOT do?

  • The Office of the Ombuds is neutral, so we do not take sides.
  • We cannot make management decisions or policy, though we can offer recommendations.
  • We are not the FINRA team that handles investigations of customer complaints about broker-dealers, their employees, or registered investment professionals.
    • Please file such complaints with FINRA here.
    • Visit this page to file a tip about potentially fraudulent, illegal, or unethical activity relating to financial services.
  • We cannot provide confidential regulatory information, such as the outcome of regulatory investigations.
  • We do not replace existing FINRA processes or programs.
    • Unless doing so is not feasible, before contacting us with a concern, we ask that you raise your concern with the relevant FINRA department or follow any established process. We are available to help you identify such options.
  • We cannot handle matters outside the scope of FINRA’s jurisdiction.

 

Who contacts the Office of the Ombuds?

Of the people who contacted us in 2022:

✷ 78% were Investors
Members of the public who currently have an investment account or may intend to open an investment account.

✷ 12% were Registered Investment Professionals
People associated with broker-dealers who are, were, or seek to be registered with FINRA.

✷ 3% were Broker-Dealers
Firms that are, were, or seek to be registered with FINRA.

✷ 1% were Issuers
Publicly traded companies appearing on an exchange or another quotation system.

✷ 1% were FINRA Employees
FINRA employees or contractors.

✷ 5% were Miscellaneous
Arbitrators, attorneys not calling on behalf of constituents, authors, and visitors who do not identify themselves.

 

What do people address when they contact us?

The following overviews provide a sample of the topics we addressed in 2022.

Scams

Individuals from multiple countries contacted us about fraudulent schemes. Some of the schemes were imposter scams that involved people fraudulently pretending to be FINRA staff to obtain account or other sensitive information. Others were advance fee schemes in which investors were told they must pay a fee in advance to redeem their funds.

We answered questions about the fraudulent activity, shared educational resources, and took other steps as necessary.

Investor Complaints and Regulatory Tips

We received complaints from investors about FINRA staff’s handling of investor complaints and regulatory tips. Many of these complaints pertained to staff not being able to provide details regarding FINRA’s investigations. Because FINRA’s investigations are confidential, FINRA staff are not able to share investigative steps or findings. We reviewed staff’s work and discussed questions or concerns with management.

Maintaining Qualifications Program

In 2022, FINRA implemented the Maintaining Qualifications Program (MQP) to permit eligible individuals to maintain certain qualifications for up to five years. Following the launch of the program, we received feedback and questions from people who missed the March 2022 enrollment deadline.

After evaluating the feedback and questions we received, we shared information with management, which corroborated other sources of program feedback. In March 2023, FINRA amended FINRA Rule 1240.01 to provide a second MQP enrollment period for previously eligible individuals.

Investigations/Examinations/Reviews

We received concerns regarding FINRA’s investigations, examinations, and reviews. Some constituents complained about the length of time FINRA took to complete such matters. Others expressed dissatisfaction regarding outcomes.

We reviewed staff’s work and discussed questions or concerns with management.

Rules and Regulations

Constituents complained about FINRA rules relating to topics such as pattern day trading, BrokerCheck disclosures, and requirements for the processing of corporate actions.

We shared information with management and provided resources to the constituents.

Trading Halt

We received contacts relating to a corporate action and trading halt. The contacts covered multiple topics such as:

❖ Why did FINRA halt trading in the security?
❖ For investors who did not sell their shares before the trading halt, what happened to their shares?
❖ What happened to short positions in the security after the trading halt?

We discussed these and other topics with investors. We also addressed investors’ concerns with management.

 

Contact the Ombuds team when you want to raise an issue and you:

  • Seek confidentiality or anonymity.
  • Seek assistance that is neutral.
  • Want to speak with someone independent from FINRA’s regulatory role.

You can contact us anonymously or confidentially. 

Submit Online here.