D.C. Circuit Conflicted Over Case That Could Transform FINRA

D.C. Circuit judges voiced apprehension Thursday about the potential upheaval their ruling could bring, either way, in a case pitting a securities broker against a linchpin regulatory body for financial markets.

The three-judge panel expressed concerns about the implications for the Financial Industry Regulatory Authority and its government overseer, the US Securities and Exchange Commission, if the court were to endorse the view of Alpine Securities Corp.—once among America’s largest clearinghouses—that FINRA shouldn’t wield enforcement authority over the securities industry.

Chief Judge Sri Srinivasan asked whether a change to FINRA under the Appointments Clause would mean its hearing officers ...