Brokerage Regulator Plans to Rebate $100 Million to Member Firms. Investor Advocates Call It ‘Parody of Justice.’
An organization of lawyers who represent investors says Finra’s budget surplus should go to help pay tens of millions of dollars in unpaid customer arbitration awards.
March 26, 2026, 4:23 pm EDT
Later this month, brokerage firms are scheduled to receive their share of a $100 million refund of the membership dues they pay to Finra, the industry’s self-regulatory organization. An association of attorneys who advocate for investors argues that the money would be better spent addressing unpaid arbitration awards.
The Public Investors Advocate Bar Association, or Piaba, is decrying Finra’s latest plan to issue member firms that are in good standing and paid a full year of dues in 2025 rebates of at least $1,200 due to a budget surplus.
“This is a parody of justice, and it tarnishes the reputation of Finra as an institution that is supposed to protect investors and promote market integrity,” says Piaba President Michael Bixby, managing attorney at Bixby Law. “Retirement savers and investors who are the victims of misconduct rely on Finra’s arbitration forum to hold bad actors accountable.”
Finra data indicate that between 2020 and 2024, $80 million in customer awards went unpaid, and Piaba argues that that figure significantly understates the issue, given that many investors don’t pursue arbitration in the first place if they feel the firm isn’t likely to pay a potential award.
Finra’s response. The regulator counters that the fee rebate is a separate issue from unpaid arbitration awards, which it acknowledges are a problem but points to a number of rule and policy changes it has enacted to ensure that more awards are paid in full.
“Finra’s member firm fee structure is not designed to address unpaid arbitration awards,” a spokesman for the regulator says. “Finra has been focused on this important issue for many years, and our comprehensive report in 2018 reviewed the potential additional measures that could be taken to enhance resources and incentives for paying awards.”
Finra, which operates under the oversight of the Securities and Exchange Commission, has adopted a rule requiring certain firms that have been deemed “restricted” because of a history of disciplinary actions, arbitration claims, or other red flags to set aside funds that could be used to pay arbitration awards, among other changes.
That isn’t enough for Piaba, which lambasted the regulator for distributing rebates to members last year instead of satisfying unpaid awards. A budget surplus in 2024 prompted Finra to issue $50 million in rebates.
“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,” Bixby says.