Finra $100M Rebate To Firms Blasted By Investor Advocates
March 30, 2026 • Tracey Longo
A $100 million rebate from the Financial Industry Regulatory Authority to member firms is drawing sharp backlash from investor advocates, who say the move comes as tens of millions in arbitration awards remain unpaid.
Investors who won in Finra arbitration were stiffed out of $80 million in awards between 2020 and 2024, according to data from the Public Investors Advocate Bar Association, which is leading the charge against the self-regulatory organization. In 2024 alone, about 37 cents of every dollar awarded to investors went unpaid, with roughly one in four successful cases resulting in no recovery, the group said.
“This is a parody of justice,” said Michael Bixby, president of PIABA and managing attorney at Bixby Law, adding that his own investor-clients, which include retirees and small farmers, have been left unpaid for several million. “Finra is supposed to protect investors and promote market integrity, yet investors are still waiting to be paid while firms get money back.”
The rebate, approved by Finra’s board, follows a $50 million rebate issued last year. It will be distributed to eligible member firms based on regulatory fees paid in 2025, driven by higher-than-expected revenue tied to strong trading activity.
Joe Wojciechowski, president-elect of PIABA, blasted the move. “After they gave back $50 million last year, they have the nerve to give back another $100 million?” he said. “It’s a disgrace.”
Critics argue the funds could have been used to address what they describe as a growing crisis of unpaid arbitration awards—a problem that has persisted for years and shows little sign of improving.
Bixby pointed to several recent cases involving Center Street Securities in which clients won sizable awards that remain unpaid. The cases involved blue-collar investors, including factory workers and farmers, with awards ranging from hundreds of thousands to more than $1 million.
“They went through the process. They testified. They won,” Bixby said. “And they haven’t gotten paid a penny.”
Many unpaid awards stem from small brokerage firms that shut down or declare bankruptcy before paying claims. In some cases, advocates say, firms restructure or shift assets in ways that make recovery difficult.
Bixby described situations in which firms continued operating under related holding companies not regulated by Finra, where affiliates can fold up shop and reopen under a new name while leaving liabilities behind. “They can continue doing business and profiting while these awards just sit there unpaid,” he said.
Finra, in a statement, defended the rebate as consistent with its financial policies.
“Providing a fee rebate under these circumstances is consistent with FINRA’s Financial Guiding Principles, our status as a not-for-profit membership organization and a sustainable funding plan,” spokesman Joe Atmonavage said.
He added that the rebate will not impair Finra’s ability to carry out its regulatory responsibilities.
Finra also emphasized that its fee structure is not designed to address unpaid arbitration awards and said it has taken steps to strengthen enforcement, including rules requiring certain firms to set aside funds and measures to improve transparency around nonpayment.
Still, investor advocates say those efforts have not solved the problem.
PIAba argues the true scope of the unpaid awards is even larger because many investors never pursue claims if they believe firms will not pay. At the same time, the group says, arbitration costs for investors have risen.
“Finra is nickel-and-diming Main Street while giving money back to Wall Street,” Bixby said.
Wojciechowski pointed to recent congressional scrutiny of Finra’s role as a self-regulatory organization. “They’ve been criticized from both sides of the aisle,” he said. “And this is the response?”
The issue has drawn attention on Capitol Hill, where lawmakers have questioned whether Finra is doing enough to ensure investors are compensated when they win cases.
A“Many of the solutions require Congress or the SEC,” Atmonavage said, noting that Finra has studied the issue and implemented rule changes where it can.
PIABA has urged regulators and lawmakers to take more aggressive steps, including implementing stronger financial requirements for firms and mechanisms to guarantee payment of awards.
Without such changes, advocates warn, the system risks losing credibility.
“These are not abstract numbers,” Bixby said. “These are people who trusted the system, went through the process and won — and still didn’t get justice.”