Plaintiff Lawyers Blast Finra’s $100 Million Rebate as ‘Parody of Justice’
March 24, 2026 • Karmen Alexander
A trade group representing plaintiff lawyers told the Financial Industry Regulatory Authority that its $100 million fee rebate announced last week amounts to a “parody of justice.”
The Public Investors Advocate Bar Association in an announcement on Tuesday questioned the optics of Finra reimbursing its member firms despite a persistent, “multimillion-dollar crisis” of firms failing to pay arbitration awards. From 2020 to 2024, around $80 million of Finra arbitration awards went unpaid, PIABA noted.
The group also noted that the rebate came as Finra was raising customer arbitration fees, which makes it more expensive for investors to bring claims against firms.
“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,” Michael Bixby, president of PIABA and managing attorney for Bixby Law, said in a statement.
“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 added.
A Finra spokesperson defended the rebate as being consistent with the regulator’s “guiding principles, and said it “will not adversely impact our short- or long-term financial planning or ability to perform our regulatory responsibilities for the benefit of investors.”
“The rebate was prompted by higher-than-expected net income, driven largely by regulatory fees associated with record-level trading volumes and firm revenue,” the spokesperson said. “Based on these results, and after consideration of FINRA’s updated projections regarding revenues, expenses and overall market conditions for the next several years, FINRA’s Board approved the rebate.”
The spokesperson also noted that its member fees are not used to cover unpaid arbitration awards, an issue it has been “focused on” for several years.
The regulator maintains a list of delinquent brokers and firms and has said it would require high-risk firms to set aside funds, although none initially had qualified after the rule took effect in 2024. That same year, roughly one quarter of damage awards worth $22 million combined went unpaid, according to the most recent Finra statistics.
Meanwhile, Finra has come under fire from investor advocates as it undertakes a “modernization” effort that critics say reflects a more pro-industry approach. Finra reported that its enforcement activity fell last year as it brought fewer disciplinary actions.
Earlier this month, PIABA executive director Jennifer L. Shaw testified before congress that proposed arbitration “reforms” also follow “the path towards securities industry appeasement and against the best interests of investors.”