FINRA Authority Fight Carries Weight But May Be a ‘Hard Ask’

A newly identified paradox in the Financial Industry Regulatory Authority’s enforcement role threatens to dismantle the private regulator, but courts reviewing the issue may not have the appetite to go that far.

Alpine Securities Corp.‘s constitutional challenge at the US Court of Appeals for the D.C. Circuit fits into a broader wave of litigation against the authority of federal agencies. Once among the largest US clearing firms, Alpine is now combating banishment from FINRA—which would prevent it from operating entirely—by arguing the regulator’s structure and operation violate the separation of powers, the appointments clause, and the delegation of powers. ...