FINRA announced that they have created a new Office of the Whisteblower to expedite review of high-risk tips. FINRA Senior Vice President Cameron Funkhouser will oversee this new office. What’s not clear to me is how this new initiative differs from the existing File a Regulatory Tip procedure. According to the press release, this new initiative “will not replace the exist process for handling the thousands of tips and complaints that come through the existing hotlines.”
FINRA states that they receive between 4,500 and 6,000 formal investor complaints annually, which are vetted by FINRA’s Front End Cause Unit. (I find it interesting that the Front End Cause Unit is missing from the FINRA website.) I am not sure if these numbers include regulatory tips.
I am disappointed that the FINRA whistleblower lines vary widely in the information collected and the method of filing:
- You can reach the new Office of the Whistleblower by email (firstname.lastname@example.org) or phone (1-866-96-FINRA)
- Regulatory tips by mail, fax or an ugly and overly detailed webform: FINRA – Regulatory Tips Form
- Investor complaints by mail, fax (an ugly 5 page form) or through a lengthy online interview File online FINRA complaint.
So what if I am an investor and I think my broker is violating a regulation and committing serious fraud. Do I fill out all three? Is there going be a turf war inside FINRA over who is handling which types of complaints?
It is a great move by FINRA to focus on the whistleblowing and complaint process. Unfortunately, it looks like they made it more complicated instead of easier.
- FINRA’s Office of the Whisteblower
- FINRA Announcement – FINRA Announces Creation of “Office of the Whistleblower”
- Securities Docket – FINRA Introduces Creation of “Office of the Whistleblower”
- FINRA’s File a Regulatory Tip
- Search of the FINRA website for “Front End Cause Unit”
- Wall Street Journal – SEC Moves to Review Whistleblower Complaints, Enforcement Tips