FINRA Enforcement Authority Turns on Looming Appeals Court Fight

Wall Street’s self-regulator will defend its ability to conduct enforcement activities before a US appeals court Thursday in a case it’s calling an existential threat.

Alpine Securities Corp. says the Financial Industry Regulatory Authority acts as a governmental entity and violates constitutional provisions that are applicable to it when it takes on an enforcement role. And if FINRA isn’t a state actor, it shouldn’t be enforcing federal law, Alpine said in a briefing.

“This suit poses an existential threat not only to FINRA, but also to Congress’s time-tested approach of using private entities to assist in fulfilling important regulatory ...