“The obvious and concerning question in that years-long process involving a troubled broker that Finra now recognizes is, ‘What is he or she doing to his or her customers while the appeal is pending?’" Edwards said. "PIABA members have seen many cases over the years where bad actors have used the appeal process to perpetuate additional fraud against the investing public and appreciate that Finra is attempting to now stop this from continuing?
The rule is aimed at reducing recidivism among brokers who have a history of misconduct, supporters of the rule say.
“Finra needs to be able to strengthen its ability to actually stop these bad actors immediately, not just be able to identify them and then put them in a years-long process that allows further misconduct,” Edwards said.