Supreme Court Declines to Hear Alpine’s Challenge to FINRA’s Authority

The U.S. Supreme Court rejected a challenge from broker-dealer Alpine Securities, which argued that the enforcement powers granted to the Financial Industry Regulatory Authority are unconstitutional.

The justices’ decision leaves in place a lower court’s ruling, allowing FINRA to proceed with an enforcement action against Salt Lake City-based Alpine. FINRA alleges that Alpine stole over $54.5 million from its customers.

FINRA, a non-governmental self-regulatory organization, operates under federal law to supervise U.S. broker-dealers, aiming to protect investors and maintain the integrity of securities markets. The organization has accused Alpine of defrauding customers through excessive fees and misuse of investments and has considered expelling the firm.

As background, during FINRA’s 2018 examination of Alpine’s securities certificate review process, it discovered that Alpine intended to charge customers a $5,000 monthly account fee. In 2019, FINRA filed a disciplinary complaint, and in March 2022, the Hearing Panel found that Alpine charged unreasonable and unfairly discriminatory fees, made unauthorized securities transactions, misused and converted customer assets and priced securities trades unfairly. Alpine appealed the decision.

The Hearing Panel had originally stated that, from about October 2018 to July 2019, Alpine intentionally converted customer funds and securities, without authorization, to pay exorbitant fees imposed by the firm, including the $5,000 monthly account fee. The Hearing Panel also asserted that Alpine treated customer securities as abandoned and seized them by moving them to firm accounts. These actions also constituted a misuse of customer assets. The Hearing Panel also stated that Alpine charged an unreasonable illiquidity and volatility fee, along with a $1,500 fee to withdraw securities certificates from the depository trust company, or DTC.

Alpine had sued to block FINRA’s expulsion proceedings, contending that the organization’s structure violates the U.S. Constitution’s private nondelegation doctrine. This principle limits federal agencies’ ability to delegate authority to private entities like FINRA.

In 2022, the U.S. Court of Appeals for the District of Columbia Circuit offered Alpine a partial win, ruling that FINRA could not expel member firms in expedited proceedings without review by the U.S. Securities and Exchange Commission. The D.C. Circuit found that the absence of SEC review likely violated the private nondelegation doctrine.

However, the appeals court also permitted FINRA to continue its enforcement action against Alpine, reasoning that it wouldn’t cause the immediate, irreparable harm that an eventual expulsion might, such as the firm going out of business. This led Alpine to appeal to the Supreme Court.

Both FINRA and the Trump administration opposed Alpine’s appeal. In March 2025, Chief Justice John Roberts denied Alpine’s request to halt FINRA’s enforcement proceedings during the ongoing appeal. This decision permitted FINRA to continue its disciplinary actions against Alpine while the broader constitutional issues remained under judicial consideration.

Alpine’s legal challenges were part of a broader discourse on the constitutionality of self-regulatory organizations like FINRA.

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