Investor Advocates Blast FINRA’s $100M Fee Rebate, Cite $80M in Unpaid Arbitration Awards

An investor advocacy group has publicly condemned FINRA’s decision to return $100 million in regulatory fees to its member firms, calling the move a “parody of justice” given that tens of millions in customer arbitration awards remain unpaid.

The Public Investors Advocate Bar Association, or PIABA, issued the statement after FINRA distributed the funds to member firms on March 31.

PIABA president Michael Bixby said the decision “tarnishes the reputation of FINRA as an institution that is supposed to protect investors and promote market integrity.” From 2020 to 2024, approximately $80 million in FINRA arbitration awards went unpaid, according to PIABA data. In 2024 alone, roughly one in four successful arbitration cases resulted in no recovery by the winning investor.

PIABA said the rebate was particularly ill-timed given that FINRA has simultaneously raised customer arbitration filing fees, making it more expensive for investors to bring claims against member firms.

Bixby cited several recent cases involving Center Street Securities as examples of the problem. He described clients — including factory workers and farmers — who won arbitration awards ranging from hundreds of thousands to more than $1 million but have not been paid.

FINRA defended the rebate. A spokesperson said the distribution was driven by higher-than-expected net income in 2025, reflecting record-level trading volumes and firm revenue, and that the decision was consistent with the organization’s Financial Guiding Principles as a not-for-profit membership organization. The spokesperson also said that FINRA’s member fee structure “is not designed to address unpaid arbitration awards,” an issue the regulator said it has focused on for years.

FINRA paid a $50 million rebate to member firms last July with respect to 2024 fees. The back-to-back rebates, totaling $150 million over two years, have drawn criticism from investor advocates who argue that FINRA has structural tools available to address the unpaid awards problem but has been slow to deploy them.

PIABA has called on Congress and the SEC to require firms to maintain additional capital to guarantee payment of arbitration awards. FINRA has previously studied the issue and implemented targeted rule changes requiring certain high-risk firms to set aside funds, but said initially no firms had qualified under the rules when they took effect in 2024.

Visit the AltsWire directory page.