FINRA Subject to Constitutional Constraints, Adviser Argues

The Financial Industry Regulatory Authority Inc. acts as a governmental entity and violates constitutional provisions that are applicable to it when it conducts enforcement proceedings, an investment adviser said in a brief to the D.C. Circuit.

And if FINRA isn’t a “state actor,” it shouldn’t be enforcing federal law, Alpine Securities Corp. said Monday in its opening salvo in an appeal to temporarily protect its business from a FINRA proceeding.

At issue is whether the advisory firm is entitled to a preliminary injunction while it litigates its constitutional challenge. Because that inquiry looks at the likelihood of Alpine’s success on ...